Question

accounting standred _ 14​

Answer 1

Answer:

In general meaning Amalgamation implies blending of two or more existing entities into one, during the blending process blended entities losing their identities and forming into one separate legal entity having its sole identity. Amalgamation could be done either by the transfer of two or more existing entity to new entity or by the transfer of one or more undertaking to an existing company.

This standard deals with accounting for amalgamation and the treatment of goodwill or reserves and AS-14 includes the direction for amalgamation of companies although it’s some of the provisions also applies to other entities. It is important to understand the difference between the word Amalgamation and Acquisition.

There are two methods of amalgamation viz. “Amalgamation in the nature of Purchase” and “Amalgamation in the nature of merger”.

Acquisition includes the purchase of whole or part of the shares or whole or part of the assets of another company in consideration of cash or the payment by way of issuing the securities or partly by one method and partly by other method. The distinguishing feature of the acquisition is that during this process the company who is acquired does not loss its existence as separate entity.

NOTE that the standards of accounting of amalgamation do not apply to the rules of acquisition.

Explanation:

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