Question

Question No. 42
If X Ltd. amalgamates with Y Ltd. then the accumulated business losses and unabsorbed depreciation of X Ltd.
a) cannot be carried forward by Y ltd.
B) can be carried forward by Y ltd.
c) cannot be carried forward by X Itd.
d) can be carried forward by X Itd.​

Answer 1

A bit is the right answer ok

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Answer 2

The accumulated business losses and unabsorbed depreciation of X Ltd. B) can be carried forward by Y ltd.

• In the process of amalgamation not always the losses and unabsorbed depreciation are used for a fresh start.

• In many cases, the business losses and unabsorbed depreciation accumulated over time by the predecessor companies survive this process and can be carried forward by Y Ltd. (in this case).
• Especially in the case of vertical amalgamation the profits or losses can be carried back as an offset to the predecessor company.