Question

Purchase consideration may be settled in

Answer 1

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Top 4 Methods of Purchase Consideration

• Method # 1. Lump Sum Method:
• Method # 2. Net Worth or Net Assets
• Method # 3. Net Payment Method:
• Method # 4. Intrinsic Value Method (Shares Exchange Method):

Answer 2

Answer:

Purchase consideration may be settled by appropriate deposit account of portfolio so that the transaction can be settled.

Explanation:

• Accounting Standard No. 14 defines the acquisition price as "the sum of shares and other securities issued and any payments made by the acquiring company, in assets or otherwise, to the shareholders of the transferor company."
• Price Consideration payable in connection with a Purchase Transaction will be debited from the relevant Portfolio Savings Account at the time and date normally required for the funds to settle the transaction in the relevant market.
• Net Value or Net Assets Method: during this method, purchase consideration is calculated by adding the values of the varied assets assumed by the acquirer and subtracting them from the values of the various liabilities assumed by the acquirer.

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