If at any time the executives employment is terminated in connection with any reconstruction or amalgamation of the company or any of the group companies whether by winding up or otherwise and the executive receives an offer on terms which are similar in all material respects to the terms of this agreement from a company involved in or resulting from such. You might like meaning and concept of business combination advantages and disadvantages of business combination. Amalgamation and internal reconstruction study notes doc. Jan 11, 2018 amalgamation is defined as the combination of one or more companies into a new entity. Also like our facebook page for latest updates and notes. Aug, 2015 accounting for amalgamation partii amalgamation means the liquidation of one or more companies and transfer of business of liquidated entities to another entity. Introduction following the economic reforms in india in the post 1991 period, there is a discernible trends among promoters and. Accounting for amalgamation, absorption and external. In amalgamation, the identity of both the companies exist and survive. Sep 18, 2010 neither reconstruction nor amalgamation has a precise legal meaning. Ca final fr amalgamation internal reconstruction available at. Introduction to amalgamation amalgamation of companies.
An introduction and sebi guidelines lesson objectives to understand the process of terms mergers and amalgamation. Legal, accounting and taxation aspect of amalgamation. When the transferee company decides to compensate the transferor company on the basis of fair values of the assets and. Concept and types of reconstruction accountingmanagement. There may be amalgamation either transfer of two or more undertakings to an existing company or new company. Reconstruction and amalgamation legal news law news. The provisions of the act also deal with compromise or arrangement within or without amalgamation or merger.
Corporate accounting multiple choice questions and answers. Amalgamation consolidation business debits and credits. Amalgamation absorption and reconstruction of companies. Reconstruction of companies external reconstruction. Meaning of external reconstruction differences between. Problems on amalgamation and external reconstruction. Chapteriii legal provisions relating to amalgamation in india. In this article we will discuss about the top five problems on amalgamation and external reconstruction with their relevant solutions.
Amalgamation of banking and government companies 8. Difference between internal and external reconstruction last updated on june 8, 2017 by surbhi s reconstruction is a process of the companys reorganization, concerning legal, operational, ownership and other structures, by revaluing assets and reassessing the liabilities. It is the conversion of two companies and two balance sheets into one company and one combined balance sheet. However, one should remember that amalgamation as its name suggests, is nothing but two companies becoming one. Free logos and buttons create an image just like this. In a number o c absorption a tion existing comp wing does. The entries in the case of amalgamation in the nature of merger is almost similar to the entries given above, the only difference is. The accounting procedure of internal reconstruction is distinct from that of amalgamation, absorption and external reconstruction. External reconstruction takes place when an existing company goes into liquidation for the express purpose of selling its assets and liabilities to a newly formed company which is generally owned and named alike. If you required any notes then please let us know by commenting in comment box we will try our best to provide the same to ipfc. Amalgamation, absorption and internal and external reconstruction liquidation of accounts. Related topics meaning and features of amalgamation. The primary difference between amalgamation and absorption of companies is that in amalgamation, the two companies are liquidated to form a new company, but in absorption only the merged company goes into liquidation, but there is no formation of a new company.
Financial accounting mumbai university sem 6 tybcom amalgamation, absorption and external reconstruction concept of statutory reserve and liquidation expenses financial accounting mumbai university sem 6 tybcom amalgamation, absorption and external reconstruction net asset method part 1 of 2. Understand selection from corporate accounting book. Features of absorption one or more companies are liquidated. The accounting record of absorption is similar to that of amalgamation. Accounting for amalgamation, absorption and external reconstruction 1. Amalgamation is defined as a simple arrangement or reconstruction of business. Jun 08, 2017 difference between internal and external reconstruction last updated on june 8, 2017 by surbhi s reconstruction is a process of the companys reorganization, concerning legal, operational, ownership and other structures, by revaluing assets and reassessing the liabilities.
May 19, 2020 external and internal reconstructions amalgamation of companies, advanced corporate accounting b com notes edurev is made by best teachers of b com. Amalgamation and external reconstruction 8 accounting problems. Accounting for external reconstruction the accounting procedure in case of external reconstruction is the same as in case of amalgamation or absorption in the nature of purchase. In the previous articles, we have given as 6 depreciation and as 26 intangible assets. Amalgamation amalgamation is a process of unification. Strictly speaking, it is neither amalgamation nor absorption. Learn financial accounting mumbai university sem 6. For reconstruction, the owner retains at least 90% of the assets directly or indirectly after the transfer. Ca final fr amalgamation internal reconstruction cakart. Today we are providing the complete details of as 14 accounting for amalgamation i. It is a process that involves combining of two or more companies as either absorption or as blend. Accounting standards14 calculation of purchase consideration under different methods,settlement of purchase consideration problems on amalgamation, absorption and external reconstruction. Amalgamation is defined as the combination of one or more companies into a new entity. Amalgamation, absorption and reconstruction of companies determining purchase consideration.
Meaning and features of absorption accountingmanagement. Amalgamation module vi amalgamation absorption and. Balance sheet as on 31st march 2014 liabilities anita ltd. Know the various meanings of the terms amalgamation, absorption and external reconstruction. Amalgamation race, a now largely archaic term for the merger of people of different ethnicities and races amalgamation, another name for a trade union, chiefly used in the united kingdom. External and internal reconstructions amalgamation of companies, advanced corporate accounting b com notes edurev notes for b com is made by best teachers who have written some of the best books of b com. Internal reconstruction which is carried out without liquidating the company and forming a new one, there may be external reconstruction wherever an undertaking is being carried on by a company and is in substance transferred, not to an outsider, but to another company consisting substantially of the same shareholders with a view to its being continued by the transferee company, there is. As 14 accounting for amalgamation revised summary pdf. Generally, larger company purchase the business of smaller company. Download cbse notes, neet notes, engineering notes, mba notes and a lot more from our website and app. Distinction between external reconstruction and amalgamation. This document is highly rated by b com students and has been viewed 4684 times.
Find all ca cs cma study materials in toggle navigation for indias best ca cs cma video classes call 9980100288 or visit here. What are the differences between amalgamation, absorption and. A new company x is formed to take over the business of an existing company y which is wound up. The process of two or more companies combining to form a new company is called absorption. Mcq on amalgamation and external reconstruction revised 2020 facebook. Mar 07, 2014 accounting for amalgamation, absorption and external reconstruction 1. This document is highly rated by b com students and has been viewed 2973 times. The following information has been extracted from the balance sheets of p ltd. Absorption of companies involves combination of companies, whereas external reconstruction does not involve any combination. Amalgamation and external reconstruction 8 accounting. Amalgamation book value consolidation business free.
A company is free to engage the services of brokers and pay brokerage in. The above two companies amalgamated on the date of the balance and a new. Where an undertaking is being carried on by a company and is in substance transferred, not to an outsider, but to another company consisting substantially of the same shareholders with a view to its being continued by the transferee company, there is a reconstruction. Amalgamation of companies by cacma santosh kumardownload. Mcq on amalgamation and external reconstruction revised 2020. Is formed to take over the business of an existing co. Amalgamation, absorption and reconstruction of companies determining purchase. Jul 26, 2018 the primary difference between amalgamation and absorption of companies is that in amalgamation, the two companies are liquidated to form a new company, but in absorption only the merged company goes into liquidation, but there is no formation of a new company. Understanding inter company holdings and numerical on the intercompany holdings.
Unit iv amalgamation of companies for corporate accounting bcom sem 4 delhi university. Accounting for amalgamations the accounting issues pertaining to amalgamation as defined under the provision of the companies act1956 are dealt under accounting standard as 14 as evolved by the institute of charted accountant of india. It is similar to amalgamation though not exactly the same. Jun 16, 2017 internal reconstruction by cacma santosh kumar. The wound up company is called the vendor or transferor and the new company is called the vendee or transferee. Amalgamation and internal reconstruction study notes. In corporate finance corporate finance overview corporate finance deals with the capital structure of a corporation, including its funding and the actions that management takes to increase the value of, an amalgamation is the combination of two or more companies into a larger single company. The act and the relevant rules pertaining to amalgamation are to be followed scrupulously. In amalgamation, one company merges with another company and forms a new company.
Presently, the high court enjoys power of sanctioning amalgamation matters under section 394 of the act though it is a. Mcq on amalgamation and external reconstruction free bcom. For amalgamation, there will be no substantial change in the ownership of the respective companies except for the fusion into common ownership of what was previously in separate ownership. Difference between internal and external reconstruction with. When two or more companies carrying on similar business decide to combine, a new company is formed, it is known as aamalgamation babsorption cinternal reconstruction dexternal reconstruction 16. In this article we will discuss about the top eight accounting problems on amalgamation and external reconstruction with their relevant solutions. Amalgamation free download as powerpoint presentation. Amalgamation, absorption and external reconstruction. Neither reconstruction nor amalgamation has a precise legal meaning. Unit iv amalgamation of companies for corporate accounting. Meaning and difference between amalgamation absorption external reconstruction types of amalgamation. May 17, 2020 introduction to amalgamation amalgamation of companies, advanced corporate accounting b com notes edurev is made by best teachers of b com. Term is used when one existing company goes into liquidation and a new co.
Financial, stamp duty and taxation aspects of amalgamation 6. The following are the summarised balance sheets of v ltd and p ltd as at 31st march, 2012. External and internal reconstructions amalgamation of. Accounting procedures external reconstruction revalue assets and liabilities to cater for claims in old. Difference between amalgamation and absorption with. Problems on amalgamation, absorption and external reconstruction amalgamation problem no. Numerical on accounting treatment of amalgamation, absorption, internal and external reconstruction. The scheme of reconstruction was agreed as follows. The nature of business of both companies is similar.
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