Question

When amalgamation is in the nature of merger the accounting method to be followed is?

Answer 1

Explanation:

अंडर द पुलिंग ऑफ इंटरेस्ट मेथड द डिफरेंस बिटवीन द परचेस consideration and share capital of transferee company should be adjusted to

Answer 2

Answer:

When amalgamation is in the nature of merger the accounting method to be followed is the pooling of interests method.

Explanation:

What is pooling of interest method?

• Assets and liabilities are displayed at their book values when using the pooling of interest method of accounting; but, while using the purchase method of accounting, the assets and liabilities are shown at their fair market value.
• Assets and liabilities of the merging entities are recorded collectively under the pooling of interests approach.
• The accounting technique known as "pooling-of-interests" determined how the balance sheets of two companies that were merging would be joined.
• The buy accounting technique, which itself was superseded by the present approach, the purchase acquisition method, took the place of the pooling-of-interests method.
• The pooling-of-interests accounting method is no longer permitted for business mergers. Additionally, they won't use the conventional acquisition approach to account for mergers in their financial statements.

Thus, merger and purchase procedures are two different types of amalgamation.

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