Amalgamation queries urgent


Doing articleship

few questions related to amalgamation:-

1.In case of merger,what is the treatment of reserves whether they are transferred to realisation account or equity shareholders account ?

2.If debentures are discharged at premium or at cash then amalgamation will be done by purchase method or merger ?

3.Employees profit sharing fund,staff provident fund,workmen's compensation fund are reserves or current liability ?

Please reply ASAP...thank you

 
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1. In the books of vendor company, treatment of reseves will be same as it was in the case of purchase method i.e. it will be transferred to Equity Shareholders A/c.

2. If debentures are discharged at premium, amalgamation will be done by Purchase Method, because the purchasing company is taking over a liability i.e. Debentures at a value which is other than book value

3. Employees profit sharing fund and Staff provident fund are liabilty

and in case of workmen's compensation fund, the amount specified in question as liabilty will be liability and the remaining value will be treated as reserve

If debentures are discharged at premium or at cash then amalgamation will be done

Read more at: /forum/details.asp?mod_id=244496#.UVM2_1dbLIU
If debentures are discharged at premium or at cash then amalgamation will be done

Read more at: /forum/details.asp?mod_id=244496#.UVM2_1dbLIU

Total likes : 1 times

 
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i want to know treatment of workmen compensation fund in the books of transferor co.

 
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CA Final Student

I want  to know wat are the balance thar transferred to shareholders account in amalagamation nd which balance does it have ?????

 

 
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1) Existing share capiral 2) All Existed reserve 3) Realisation profit Will be credited to shareholders a/c and 1) Existed loss like Preliminary Exp. 2 ) Realisation loss 3) ES & PS in new company Will be debited to shareholders A/c
 
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