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Corporate Accounting by V. Rajasekaran, R. Lalitha

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9

Amalgamation, Absorption and External Reconstruction

LEARNING OBJECTIVES

After studying this chapter you should be able to:

  1. Know the various meanings of the terms “amalgamation”, “absorption” and “external reconstruction”.

  2. Understand the difference types of “amalgamation”.

  3. Understand the vital factors that have significant accounting impact.

  4. Know the accounting problems relating to amalgamation and external reconstruction.

  5. Understand the term “consideration” as per AS-14.

  6. Compute “purchase consideration” by applying any of the four methods: (i) lumpsum method; (ii) net payment method; (iii) net assets method and (iv) intrinsic value method.

  7. Record transactions in the books of the purchasing and selling companies.

  8. Understand the methods ...

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