Where does general reserve of selling company appears in amalgamated company balance sheet - while it is in the nature of amalgamation in merger
2 Replies
satish
(teaching)
(2046 Points)
Replied 28 April 2018
do not get confuse. it is very simple.
general reserve in selling company is to be transferred to equity share holders A/c only.
Amalgamtion in the nature of merger or purchase is the accounting treatment in the books of purchasing company.
so do not merge the accounting treatment in the books of purchasing company with selling company.
accounting treatment in the books of selling company means just closing the books of accounts as per companies act.
so general reserves are the accumulated profits of equity share holders. it is to be transferred to equity share holders a/c.
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