There may be amalgamation either transfer of two or more undertakings to an existing company or new company. Basis Amalgamation Absorption External Reconstruction Meaning . ----- company is the owner of the proportionate net asset of the transferor company (a)T ransferor Company (b) Holding company For More Information - Read FAQ. Loss or profit on realization a/c is transferred by the transferor company. Absorption. View AMALGAMATION OF COMPANIES.pdf from ECON 101 at Akron Comm Sch East. Loss or profit on realization a/c is transferred by the transferor company. Amalgamation: Absorption: External Reconstruction : 1. D] External Reconstruction 115-200 - national defense authorization act for fiscal year 2018 115th congress (2017-2018) On 31st March, 2012, Thin Ltd. was absorbed by Thick Ltd., the latter taking over all the assets … Accounting procedure for Amalgamation, Absorption and External Reconstruction. Amalgamation of companies results in combination of companies, but external reconstruction does not result in any such combination. Accounts of Hotel Companies 10. Redemption of Preference Shares and Buy Back of Equity Shares 9. Solved Questions: No. Accounting for Internal Reconstruction of Company (14 L) 1.1 Meaning and Provisions of Companies Act, 2013 1.2 Alteration of Share Capital 1.3 Reduction of Share Capital 1.4 Accounting Entries absorption, amalgamation and external When the merger involves liquidation of one existing sick company and formation of one new company, it is called (a) internal reconstruction (b) absorption (c) external reconstruction (d) amalgamation 12. Absorption is the process in which the one leading company takes control over the weaker company. Since absorption involves two existing companies, there may be earlier transactions between the companies, such as, sale of goods, acceptances, loans etc. Financial Accounting - Internal Reconstruction is applicable to any commerce students who are pursuing graduation or professional courses like Chartered Accountancy, Cost & Management Accountancy, Company Secretary Course, … This document is highly rated by B Com students and has been viewed 4035 times. Balance Sheet as on 31st March 2014 Liabilities Anita Ltd. Rs. External Reconstruction: Differences between amalgamation and external reconstruction 1 Revised 'Accounting Standard (AS) 14- Accounting for Amalgamations' is applicable for the accounting periods commencing on or after April 1, 2017 after considering Companies (Accounting Standards) Amendment Rules, 2016 (G.S.R. Absorption or blending of one by the other. A new company is floated to take over their business. There are two methods of reconstruction which are internal reconstruction and external reconstruction. Internal reconstruction b. Absorption c. External reconstruction d. Amalgamation 56. Numerical on accounting treatment of amalgamation, absorption, internal and external reconstruction. Such external reconstruction is essentially covered under the category ‘amalgamation in the nature of merger’ in AS 14. 6. Jun 01, 2021 - External and Internal Reconstructions - Amalgamation of Companies, Advanced Corporate Accounting B Com Notes | EduRev is made by best teachers of B Com. Amalgamation: The term amalgamation is used when two or more existing companies carrying on similar business go into liquidation and a new company is formed to take over the business of liquidated companies. Amalgamation Vs Absorption Vs External Reconstruction - Comparison through Chart Ist - External Reconstruction When a company has no power to operate his own business due to heavy loss and it sells his all business to a new company. Meaning and Computation of purchase consideration. Example: Business of X ltd is transferred in to a new X Ltd is an example of External reconstruction. Amalgamation is when two or more companies merge. A new company is floated to take over their business. Banking Company 11. Problems on Amalgamation, Absorption and External Reconstruction Amalgamation Problem No.1: (MGP-1/5.24) The following is the Balance sheet of Anita Ltd. and Sunita Ltd. as on 31st March 2014. Amalgamation and absorption Internal Reconstruction 8. absorption, amalgamation and external It includes: Two or more companies join to form a new company Absorption or blending of one by the other April 19th, 2019 - Difference between Amalgamation Absortpion and External Reconstruction Amalgamation Absorption and External Reconstuction part 1 by CMA Tarun Differences Between Consolidation and Merger Difference between Company Merger amp Amalgamation April 16th, 2019 - Best Answer Dear rudresh d the word merger or amalgamation means Notes - Free download as PDF File (.pdf) or read online for free. _____is concerned with accounting for amalgamation. Credit side – Book Value b. Debit side – Book Value c. Credit side – Market Value d. Debit side – Market Value 2 Exchange rate a. is the exchange rate at the balance sheet date b. is the mean of the exchange rates in force during a period Preference shareholders A/c b. AS – 14 - Amalgamation, Absorption & External Reconstruction (excluding inter – company holding) In the nature of merger and purchase with corresponding accounting treatments of pooling of interests and purchase method respectively. Merger b. Amalgamation, Absorption & External reconstruction Multiple Choice Questions 1. Corporate Accounting Previous year Question Paper 2016 :- Its Question paper is very helpful for you and your Exam you can get many more marks if you read full question and its solution. Amalgamation, Absorption & External reconstruction State whether TRUE or FALSE 1. Preference shareholders A/c b. Faculty-CA PS Beniwal Validity- November 2020 attempt- Your classes will be extended till 28th Feb 2021. if a new company X (New) Ltd. Valuation of Shares 12. 23 Videos . Device- Android | Mobile App No. When the merger involves liquidation of one existing sick company and formation of one new company, it is called (a) internal reconstruction (b) absorption (c) external reconstruction (d) amalgamation 12. a. external reconstruction b. absorption c. amalgamation 3. if the business of ABC Limited , a loss-making company is taken over by a new company ABC (New) Limited ,it is called a. AS – 13 c. AS – 14 d. AS - 11 5. 1. However, Amalgamation as its name suggests is nothing but two companies becoming one. Internal reconstruction b. Absorption c. External reconstruction d. Amalgamation 56. Calculation of purchase consideration 2. When one of the existing companies take over business of another company or companies, it is known as ..... (A) Amalgamation (B) Absorption (C) Internal reconstruction (D) External reconstruction 3. external reconstruction is similar to amalgamation in the nature of purchase the books of the transferor company are closed and in the books of the transferee company the purchase of the business is recorded Accounting for Amalgamation Absorption and External April 11th, 2019 - Accounting for Amalgamation Absorption and External Reconstruction 1. (c) external reconstruction (d) amalgamation 11. entrepreneur. Amalgamation of Companies. Ascertainment of discharge of purchase consideration 3. 1. meaning of external reconstruction when one company changes its external structure than it is known as external reconstruction. External reconstruction c. Amalgamation d. Internal Reconstruction 7 Currency other than the reporting currency of an enterprise a. Non-Reporting currency b. U.S. 1 Amalgamation Absorption amp External Reconstruction Introduction CA CS CMA B Com March 24th, 2019 - Explained the concept and difference between amalgamation absorption and external reconstruction Further discussed the procedure and concept to calculation of purchase consideration Way of What is Amalgamation Definition Meaning and Example III Examination , 2016. Valuation of Goodwill 13. Amalgamation, as its name suggests, is nothing but two companies becoming one.On the other hand, Absorption is the process in which the one dominant company takes control over the weaker company. Ascertainment of discharge of purchase consideration 3. Foe e.g. There are no book in india i have seen where difference among the amalgamation,absorption,external reconstruction,marger has been cleared. (A) Amalgamation B) Absorption (C) Internal reconstruction (D) External reconstruction 2. Accounts of Electricity Companies 9. When the merger involves liquidation of one existing sick company and formation of one new company, it is called a) internal reconstruction b) absorption c) external reconstruction d) amalgamation 12. The term includes absorption On the other hand, Absorption is the process in which the one powerful company takes control over the weaker company. Absorption of companies does not involve formation of a new company, however, external reconstruction … (ii) External reconstruction (44) X Ltd. goes into liquidation and an existing company Z Ltd. purchases the business of X Ltd. Accounting for Amalgamation, Absorption and External Reconstruction 1. Take this Course *Excluding ... AMALGAMATION, ABSORPTION AND EXTERNAL RECONSTRUCTION. is business of an Unlimited Views. These points are peculiar to absorption of companies. In amalgamation, the identity of both the companies exist and survive. (ii) In external reconstruction, a new company is certainly formed whereas in amalgamation a new company may be formed or in the alternative one of the exiting companies may take over the other amalgamating company or companies and no new … a. Absorption b. AMALGAMATION. Sunita Ltd Rs. 1 On Amalgamation , the transferer company transfer its liabilities to Realisation Account on a. All the combining companies are liquidated. Closing the books of vendor company or transferor company 4. ACCOUNTING FOR AMALGAMATIONS The accounting issues pertaining to amalgamation as defined under the provision of the companies act’1956 are dealt under Accounting Standard (AS) 14 as evolved by the institute of charted accountant of India. if a new company X (New) Ltd. Is formed to take over the business of an existing co. X Ltd. Then it is a case of External reconstruction Corporate Accounting sets a new standard for the textbooks with rich pedagogy and an easy-to-understand approach that aims at equipping students with a solid grounding in the concepts in corporate accounting. AMALGAMATION Ab.Ltd A.Ltd B.Ltd One or more companies are liquidated One new company is formed The nature of business of both companies is similar. Made By RS 2. Amalgamation, Absorption and External Reconstruction 7. absorption, amalgamation and external a ) Absorption (b) Amalgamation (c) Internal reconstruction (d ) Ex ternal reconstruction 9. Equity Shareholders A/c c. Profit and loss Appropriation A/c d. None of the above 57. Similar Like This. 2. External reconstruction a. Foe e.g. 3. Problems based on purchase method only. Two or more companies combining to form a new company is called absorption. Reconstruction of companies • External reconstruction :- Term is used when one existing company goes into liquidation and a new co. is formed to take over its business. However, one should remember that Amalgamation as its name suggests, is nothing but two companies becoming one. 3. 1.5 Preparation of Balance Sheet after Amalgamation, Absorption and External Reconstruction 2. II each and pay Re. Equity Shareholders A/c c. Profit and loss Appropriation A/c d. None of the above 57. For e.g. Share Capital Shares of Rs. External reconstruction b. absorption c. amalgamation 4. Amalgamation of companies involves liquidation of two or more companies, while external reconstruction involves liquidation of only one company, 2. 2. Accounts of Insurance Companies 8. All the combining companies are liquidated.

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