Prachi Srivastava (Finance) (368 Points)
04 November 2014Hi All,
Entries of "Incorporation of assets and liabilities taken over" in Purchase method and Pooling of interest method for accounting of transferee companies are very similar... with very minute differences.. I am finding difficult to identify both. Can anyone please help me on this.
CA Abhishek Goyal
(Chartered Accountant)
(516 Points)
Replied 04 November 2014
Hello.
As per my opinion, In Purchase method, While incorporating assets and liabilities in the books of accounts of the transferree co., any difference between this, trated as Goodwill or a Capital Reserve but in Pooling of Interest method you can not create Goodwill or Capital Reserve rather you adjust the Losses with the reserves.
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