Which reserves keep their identity even in an amalgamation in the nature of purchase?
ASecurities premium
BGeneral reserves
CStatutory reserves
DRevaluation reserves
Answer & Solution
Correct answer: C. Statutory reserves
Reserves created to meet statutes such as the Income-tax Act must stay identifiable for a set period, so they are an exception.
Keep practising Accounting for Amalgamations
Browse all Accounting for Amalgamations questions for CA Inter, or explore more Accounting topics.
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?