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Amalgamation of companies
Why are Reserves except Statutory Reserve not taken into the books of Transferee Company in Purchase Method of Amalgamation?
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As per the Purchase method of Amagamation, Claim of selling company i.e. Equity Share capital & Reserves are transfered to share holders of selling company [Real owner of the company].
Purchase consideration is given by Purchasing company is of "SHARE HOLDER'S FUND" i.e. Share Capital + Reserves therefore, Reserves of selling company can't not be taken over in the book of New company i.e. Purchasing company.
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