Shankar (CA) (67 Points)
04 February 2011Plaese can anyone give the answer for this also elaborate so as to write it for a 4-5 marks question
A demerger scheme was approved by the shareholders, secured and unsecured creditors. The scheme was neither in violation of any law nor against public interest. However, AS 14 was not adopted. Whether the scheme can be sanctioned?
Love Kumar
(COMPANY SECRETARY)
(101 Points)
Replied 04 February 2011
Hello,
Accounting Standard 14 which provide that any profit arising out of a capital transaction, like merger or demerger, ought to be treated as capital profit and, hence, would be transferred to capital reserve.
But the same AS 14 is applicable in case of Amalgamaiton not in Demerger. So the scheme can be sanctioned.
Regards,
Love Kumar
Shankar
(CA)
(67 Points)
Replied 04 February 2011
Hey, but what should i write if it is a 4-5 maks questiom??
CAclubindia
