Question

under pooling of interest method the difference between purchase consideration and net assets of the transferee company should be adjusted to​

Answer 1

Answer:

In pooling of interest method the difference between purchase consideration and share capital is adjusted with reserves, i.e. if purchase consideration is greater than share capital,

then the reserves is debited, and credited when purchase consideration is less than the share capital.

Explanation:

Because amalgamation in nature of merger is the previous way in which the two balance sheets are combined and a new balance sheet is created, the pooling of interest method is applicable. Thus, it is said as in the nature of fusion.

As a result, there are cases where an insurance premium is paid for a firm beyond the end of its fiscal year, including several fiscal years, and is recorded in both fiscal years under various account headings

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