alleryStart learning →In a merger, how may the transferor's Profit and Loss balance be treated?
ATreated as lost balance
BAggregated with transferee's
CCredited to capital reserve
DWritten off as goodwill
Answer & Solution
Correct answer: B. Aggregated with transferee's
Merger accounting preserves identity, so the balance is added to the transferee's own balance or moved to General Reserve.
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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?