Showing posts from April, 2016
The statement prepared by the liquidator showing receipts and payments of cash in case of voluntary winding up is called “Liquidators’ statement of account” (Form No. 156 Rule 329 of the Companies Act, 1956). There is no double e…
Internal reconstruction of a company can be carried out in the following different ways. These are as under: 1. Alteration of Share Capital; and 2. Reduction in Share Capital Alteration of Share Capital: Memorandum of Associat…
The following is the main difference: 1. No new company is formed in case of Internal Reconstruction. A new company is formed in case of External Reconstruction. 2. In case of Internal Reconstruction, no company is liquidated. …
What is Reconstruction? Reconstruction is an exercise of restating assets & liabilities by company / entity whose financial position as reflected by its balance sheet is not healthy but future is promising. This exercise is d…
Before Merger: • For Revaluation of Investments in Equity shares of Transferor co held by Transferee co, if any: • If appreciated: Investment A/c Dr To General Reserve a/c. Otherwise reverse. • For declaration of dividend by tran…
•• • Treatment of Goodwill on amalgamation: Goodwill shall be written off over a period of 5 years unless justified for longer period. •• • Balance of Profit and Loss account: In case of merger balance is aggregated with corres…
There are two methods: 1. Pooling of interest method 2. Purchase method 1. Pooling of Interests method (Merger method): The assets, liabilities and reserves of Transferor Company are recorded by the transferee company at existi…
Meaning: Purchase Consideration refers to the consideration payable by the purchasing company to the vendor company for taking over the assets and liabilities of Vendor Company. Accounting Standard – 14 defines the term purchase …
According to AS-14, Amalgamation is of two types: 1. Amalgamation in the nature of merger 2. Amalgamation in the nature of purchase 1. Amalgamation in the nature of Merger According to AS-14 on Accounting for Amalgamation, the …
1. Transfer of Assets and Liabilities ⋅ Nature of Merger: There is transfer of all assets & liabilities. ⋅ Nature of Purchase: There need not be transfer for all assets & liabilities. 2. Equity Sh…
Meaning: Amalgamation means the merging of two or more than two companies for eliminating competition among them or for growing in size to achieve the economies of scale. Amalgamation is a broad term which includes mergers (uniti…
Besides a number of advantages, cost accounting sufferers from a number of limitations. Some of them are mentioned below: 1. Lack of uniformity: Cost accounting lacks a uniform procedure. It is possible that two equally competen…
