alleryStart learning →Excess of consideration over net assets in a purchase is recorded as?
ASecurities premium account
BGoodwill on amalgamation
CCapital reserve account
DGeneral reserve account
Answer & Solution
Correct answer: B. Goodwill on amalgamation
Paying more than the net assets acquired means the transferee has paid for future income, which is goodwill.
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Related questions
In a merger, the Profit and Loss balance can alternatively go to which reserve?Consideration for amalgamation is the aggregate of securities issued and what else?AS 14 defines fair value as the amount for an asset exchange between whom?Statutory reserves keep their identity only when the transferee complies with what?When can amalgamation goodwill be amortised beyond five years?In the pooling method, conflicting accounting policies are handled how?In merger accounting, resultant assets, liabilities, capital and reserves roughly equal whIf a scheme departs from AS 14 on reserves, what must be disclosed?