Sitaution: 1.One company takes over three other companies (all are under one group of management). The high court order states that the Appointed date for the scheme of compromise and arrangement is 1st april 2007, but the effective date is the date when the scheme is filed with the ROC (in this case:10th July 2008.)
2. Audit is being done for FY 2007-08. Accounting package followed : Tally. The court order was received after March 08. Hence it is a back dated order. Consequentlky, all the transactions for the year havce been recorded in the old companies.
Query: 1. Which accounting entries will be passed on appointed date and which ones on effective date?
2. what care do i need to take as an auditor to ensure correct accounting of merger effect.?
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