Santhosh Poojary (SIEMPRE AHÍ PARA TI) (15607 Points)
15 April 2010
Incase of Amalgamation in the nature of merger,if selling( Transferor) Company already having shares in the Purchasing( Transferee) company then what will be the Effect on Purchase Consideration...pls Clarify With Example If Possible.
THANS IN ADVANCE 
Kaushik Vankadkar
(Service)
(350 Points)
Replied 15 April 2010
Dear SAN,
Purchase consideration will be calculated as normal. The next step will be to eliminate the stake of the purchasing company so as to arrive the right amount of payment to be made to other shareholders.
Remember Business precedes accounting.
Accounting is mere translation of business language into figures
When you take business decisions you thing in terms of business. You think of the best deal.
CA Mohit kumar jain
(Searching Source of Money)
(149 Points)
Replied 15 April 2010
Abc Ltd. is selling co.
Xyz Ltd. is Purchasing co.
Purchase consideration is Rs.10 Lakh Payble in 10000 Shares @ Rs.100 each
If Abc ltd. Already have 2000 Shares then now new share issue 8000
naynasakpal
(article)
(37 Points)
Replied 19 April 2010
sir,cant it be a loss of vendor co.tat it get less pc value.the co should get 10000+2000shares na? how does the co know the same co whch he had share in past,will amalgamate his firm?can you please clarify my doubt.
Santhosh Poojary
(SIEMPRE AHÍ PARA TI)
(15607 Points)
Replied 20 April 2010
| Originally posted by : naynasakpal | ||
 |
sir,cant it be a loss of vendor co.tat it get less pc value.the co should get 10000+2000shares na? how does the co know the same co whch he had share in past,will amalgamate his firm?can you please clarify my doubt. |
 |
CA Mohit kumar jain
(Searching Source of Money)
(149 Points)
Replied 20 April 2010
it is not loss for any one
because purchasing co. purchase whole business or balancesheet the share held by vendor co. is investment for him & Purchasing co. also purchase it now the purchasing co. is owner of its.
if the pc is 10000 shares then purchasing co. can issue 10000 shares & already held shares taken back by purchasing co.
so shortly it is 10000-2000 = 8000 Shares issue
Santhosh Poojary
(SIEMPRE AHÍ PARA TI)
(15607 Points)
Replied 20 April 2010
Thanks mohit for Clarification.
CAclubindia
