Question

(a) Under what situations Assets Backing Method
of valuation of shares is applicable ?​

Answer 1

Answer:

a company is a capital-intensive company and invested a large amount in capital assets or if the company has a large volume of capital work in progress then asset-based approach can be used. This method is also applicable for valuing the shares during amalgamation, absorption or liquidation of companies

Answer 2

Explanation:

This method is applicable when shares are acquired for control motives. For the purpose of valuing the shares of the company, the assets were revalued as: Goodwill Rs. 50,000; Land and Building at cost plus 50%, Plant and Machinery Rs. 1, 00,000; Investments at book values; Stock Rs.