Chapter demerger of ca final

For Demerged Co.-(i.e the co. whose divsion has got separeted into new co.)

Assests Trf

Less-Liab Trf

If Assests trf is more than liab trf, then difference is Loss on demerger because the co. has transferred its assets in excess of liab.

If liab trf is more than assets trf than diff is Cap Res because here co has reduced its liab by transferring lesser assets.

But, in many questions it is seen. No entry is made for shares issued to division to be sold. In some case the entry is passed Capital Reserve Dr. 

                                               To Resulting Co.