Corporate Accounting

Goodwill arising on amalgamation is to be

• Retained in the books of the transferee company

• Amortised to income on a systematic basis normally five years

• Adjusted against reserves or profit and loss account balance

• All of the above

Amalgamate adjustment account is opened in the books of transferee company to incorporate:

• The assets of the transferor company

• The liabilities of the transferor company

• The statutory reserves of the transferor company

• The non – statutory reserves of the transferor company

Amalgamation is said to be in the nature of merger if:

• All assets and liabilities of transferor company are taken over by the transferee company.

• Business of transferor company is intended to be carried on by the transferee company.

• Purchase consideration must be paid in equity shares by the transferee company except for fraction

  shares.

• All of the above

When amalgamation is in the nature of Purchase, the accounting method to be followed is:

• Equity method

• Purchase method

• Pooling of interests method

• Consolidated method

When amalgamation is in the nature of merger, the accounting method to be followed is:

• Equity method

• Purchase method

• Pooling of interests method

• Consolidated method