Originally posted by : cute viru
	Faiz i have no words for u,u are going to break records in coming exams.....i request to leave some gap for us also,....lol

Arey yaar main toh kuch bhi nahin huun. Mere agae aur kitne log hain. You can also do well. Just study conceptually & whatever you do, do it an excellent way. Just do to the best of your ability. God Bless you

Answer to your 3rd question follows.....

Dear Viru,

Your question is related to AS-14 & other small concepts.

See, Capital Reserve is created of transactions which are directly related to capital transaction. In a way capital reserve is a capital profit arising out of capital transactions.

Now coming to your point of crediting capital reserve in amalgamation. This credit to capital reserve or capital profit can take place both in Amalgamation in the nature of merger & Amalgamation in the nature of purchase.

One thing you note that Amalgamation is nothing but taking over of business. This take over comprises of taking over Assets & Liabilities. This results in a capital transaction... Why?????

See what you are taking is Assets & Liabilities... These Assets & Liabilities will be represented by Capital or owners capital. In other words, Owners Capital = All Assets - Outsiders Liability.

This means you are indirectly dealing with capital of other business. Owners capital is long term funds & any profit /loss arising out of it will be a capital profit / capital loss.

You cannot credit general reserve because of above reasons. General reserve is created out of revenue transactions.

So in Amalgamation in the case of merger when there is excess of share capital of the transferor Co. over Purchase consideration(PC), it leads to capital profit or capital reserve. In a way transferee Co. is paying more than  the share capital of the transferor Co. So its a capital profit to transferor Co.

Similarly in Purchase, the excess of net assets acquired over PC results in capital reserve in the books of transferor Co.

Hope you understood. Feel free to ask any doubt in relation to my reply.

So in Amalgamation in the case of merger when there is excess of share capital of the transferor Co. over Purchase consideration(PC), it leads to capital profit or capital reserve. In a way transferee Co. is paying more than  the share capital of the transferor Co. So its a capital profit to transferor Co.

Similarly in Purchase, the excess of net assets acquired over PC results in capital reserve in the books of transferor Co.

I am sure you will have a doubt in above highlighted lines that why AS-14 says share capital in merger & net assets in case of  purchase. What is the difference??

Answer lies in my reply given. See in merger you take over all assets n liabilities at book values..What is left ?? Only share capital of the transferor Co. So recall the above reply & equation. The PC will have to be compared with Share capital of the transferor co.

On the same lines, in case of purchase. You take over some assets/ liabilities or at revalued figure. This will spoil the equation given above. So PC is compared with Net Assets taken over at revalued figures. 

In merger its transfer of all Assets & Liabilities at book values.

Hope you got the point . You can recall my replies in other forum of amalgamation doubts.

faiz bro 2nd last reply is just awesome.....

Thnx Mayank bro. for your appreciation.

Originally posted by : Faiz Ahmed
	Thnx Mayank bro. for your appreciation.

U know Faiz bro whats so Rare about u?

Its not just ur talent, its ur modesty along with ur talent......hardly found in most of the talented people...

god bless u, hope u continue with ur modest nature

Originally posted by : Mayank Saraogi
	Originally posted by : Faiz Ahmed Thnx Mayank bro. for your appreciation. U know Faiz bro whats so Rare about u?   Its not just ur talent, its ur modesty along with ur talent......hardly found in most of the talented people... god bless u, hope u continue with ur modest nature

Wow!! So nice of you... Thnx yaar for your heart touching words. Its all God's blessings upon me. Surely I will do my best to maintain this attitude. 

Thnx once again. God bless you too. All The Best.!!!..

hey...hi i had a few doubts in amalgamation chapter can anybody help me clear it??

1. why do we use general reserve to set off any difference in the purchase consideration? isnt it supposed to be a revenue reserve?? i am talking about amalgamation in the nature of merger here.

2. why doesnt amalgamation adjustment account appear in case of merger?