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Computation of purchase consideration

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Is debentures issued to an amalgamating company's debentures holders considered as purchase consideration ? Please elaborate why ?
Replies (6)

No. Debentures iessued to the amalgamating company's debenture holders will not be considered as purchase consideration as the debenture holders are not considered as owners of the company. If debentures are issued to the amagamating company's shareholders then it can be considered as purchase consideration,.

Agreed with Rehaan...one more point is that even if shares are issued to debenture holders then also it will not be considered as purchase consideration. 

thankyou rehan and nitish

 

 

There is difference between treatment of debenture in purchase consideration and mode of payment of the same....

while computing the purchase consideration the debentures are not considered but again in case of mode of payment the payment to debenture holders is taken into account. ?

Please explain me.

if they are given to shareholders (equity + preference) they will be Considered as part of PC..... in this case NO

Rightly said by Ravi, anything, be it shares or debentures, given to shareholders of amalgamating company then it will be considered; but if the receipent is debentureholder then it will not be considered.

 


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