Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

amalgamation

M.PORNIMA (Coimbatore) (278 Points)

04 October 2010

Dear frndz,

Plz anyone help me out !in amalgamation questions how will i know that the given question is based on the particular method.What is the word hidden in the question?what kind of understanding is required for this purpose?

there are five cionditions to be fullfilled in the case of the nature of purchase method and if any one the conditions is not satisfied then it is pooling of interest method.

how this can be identified in the problem?

Experts help me out very urgent..............

THANKS IN ADVANCE!!!!!!!!!!!!!

Reply
Follow
Share

1 Replies

C.A. LINESH PATIL (CA) (910 Points)
Replied 04 October 2010

hello ,

1) Five conditions need to be fulfilled in case of merger not purchase.

2) see check in the question if all five conditions are fulfilled then its in the nature of merger and accordingly pooling of interest method would be applicable.

3)usually when question says one company absorb another company its in the nature of purchase.

4)many of times question specifies.

5)and even if question does not make clear n u also not clear then make assumption in the absence of required information.