#4 "TYBCOM Accounting Booster 🚀 | Amalgamation of Companies | One Shot Revision"Siraj Shaikh

Описание: Amalgamation of Companies – TYBCOM Quick Revision
📌 What is Amalgamation?

Amalgamation is the process where two or more companies combine to form a new company or one company takes over another.
It helps in business expansion, reducing competition, and increasing efficiency.
📌 Types of Amalgamation (As per AS-14):

Amalgamation in the Nature of Merger

Assets & liabilities of the old companies are combined at their book values.
Shareholders of old companies become shareholders of the new company.
No goodwill or capital reserve is recorded.
Amalgamation in the Nature of Purchase

One company purchases another company and records assets & liabilities at fair values.
Goodwill or Capital Reserve is created depending on the purchase price.
The purchasing company controls the merged company.
📌 Accounting Methods for Amalgamation:

Pooling of Interest Method (Used for Merger)
Assets & liabilities are recorded at their existing book values.
No goodwill or capital reserve is recorded.
Purchase Method (Used for Purchase)
Assets & liabilities are recorded at their fair values.
Goodwill or capital reserve is recorded based on the purchase price.
📌 Why is Amalgamation Important?
✅ Helps in business expansion and increasing market share.
✅ Reduces competition and improves operational efficiency.
✅ Leads to cost reduction and better financial management.
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