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Doubt

ajinkya (Student) (48 Points)

28 May 2011

why vendor companys reserves are not recorded in books of purchasing company in case of amalgamation in the nature of purchase and why only statutory reserves are recorded??

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Sasanka Bhalaki (Student) (1935 Points)
Replied 28 May 2011

i think Because those reserves will be distributed to the share holders of the vendor company before amalgamation..and statutory reserve should be maintained as per the rules so it is being recorded..

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CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 28 May 2011

Originally posted by : Sasanka Bhalaki
	i think Because those reserves will be distributed to the share holders of the vendor company before amalgamation..and statutory reserve should be maintained as per the rules so it is being recorded..

priyatambika ( ca final student) (323 Points)
Replied 28 May 2011

agree with Sasanka Bhalaki

swapna (student) (77 Points)
Replied 28 May 2011

I agree with Sasanka Bhalaki answer.

Samir (Chief Accountant) (80 Points)
Replied 29 May 2011

Think like chartered accountant you will get your answer. dont think like only accountant...

any way.... the name of method itself gives u answer " Purchase"

Just like if you went to shop and purchasing the item you want. Same manner amalgamation in the nature of purchase in which u r buying asset n liabilities that u want. Talking about reserve there is no hard n fast rule that those reserve compulsory to be distributed to vending shareholder, if the deal is like that reserve to be transferred then it should be transferred to purchasing company.

One short there is no compulsion that reserve to be distributed to vendor shareholder it can be transferred to purchasing company.

Regds,

Samir Shaikh

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Originally posted by : Sasanka Bhalaki
	i think Because those reserves will be distributed to the share holders of the vendor company before amalgamation..and statutory reserve should be maintained as per the rules so it is being recorded..