Case: In an amalgamation in the nature of merger accounted for under the pooling of interests method, the share capital issued by the transferee exceeds the share capital of the transferor company by ₹10,00,000. Under AS 14, this difference is:

Correct answer: D) Adjusted against the reserves in the transferee's books

Explanation

Under the pooling of interests method, no goodwill or capital reserve arises. AS 14 requires the difference between the share capital issued (plus any additional consideration) and the share capital of the transferor to be adjusted in reserves. An excess of capital issued is therefore deducted from reserves.