There are two main methods of amalgamations :
Pooling d int. method &Purchase method
1st one is used in the nature of merger & 2nd one in the case of purchase of co.
My question is can't we interchange them vice-versa??
Pls rply
Thank u
15 Replies
Ankit CA and CS
(Manager - Accounts)
(204 Points)
Replied 11 June 2010
What you want to interchange? For Pooling of interst method certain conditions are to be satisfied if they dont get satisfied then it will be regarded as purchase method.... plz elaborate ur question
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 11 June 2010
No it will be in violation of AS-14 if you interchange and use the method other than precribed by the AS under such cirumstances i.e Merger method should be followed only when 5 conditions mentioned in AS-14 prescribed are followed otherwise purchse method should be followed.
Amey Satish Gogate
(Article)
(115 Points)
Replied 12 June 2010
No, you have to aply AS-14 which says pooling of int method is to be applied only for Amalgmation in the nature of Marger
shakuntala chhangani
(FCA Course co-ordinator WIRC coaching centre)
(2525 Points)
Replied 15 June 2010
My dear, one of these two methods will be applied at the time of amalgamation only. Once amalgamated, there is no possibility of applying the other method. So, interchange is not possible.
Regards, CA Shakuntala Chhangani
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 17 June 2010
hemal
(CA FINAL)
(176 Points)
Replied 23 June 2010
As per purchase method books are incorporated from the date of acquisition while in case of accounts are prepared as if mergered entity is from the begining, so treatment will be changed if another method is used.
shakuntala chhangani
(FCA Course co-ordinator WIRC coaching centre)
(2525 Points)
Replied 24 June 2010
Dear hemal, ur answer is not clear. will u pl. clarify ur viewpoint???
hemal
(CA FINAL)
(176 Points)
Replied 25 June 2010
As per merger method accounts are prepared from the date of merger itself i.e. reserves and profit and loss are merged from the date of merger while in purchase method all the balances except statutory reserves are corporated from the begining of the financial year.
shakuntala chhangani
(FCA Course co-ordinator WIRC coaching centre)
(2525 Points)
Replied 02 July 2010
My dear, where hv u read that??? It is nowhere mentioned in AS 14.
shakuntala chhangani
(FCA Course co-ordinator WIRC coaching centre)
(2525 Points)
Replied 02 July 2010
Hey, AS 20 is calculation of EPS and not amalgamation.
hemal
(CA FINAL)
(176 Points)
Replied 03 July 2010
I know tht but accounting for amalgamtion is done in such a manner. In one method we transffered all the account balance in the books of transferee including all the reserves etc. including statutory reserves also. That means even profit or loss to the date we are transfering but in anther we are not tranfering reserves except statutory reserves. This is the same thing as define in AS 14.
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