CA Inter P1 · Chapter 7 · Question 8 of 8
Under AS 14, which of the following is the appropriate accounting method for an amalgamation in the nature of merger?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Pooling of interests method
Explanation
AS 14 requires an amalgamation in the nature of merger to be accounted for under the pooling of interests method, where assets, liabilities and reserves are recorded at their existing carrying amounts (after uniform accounting policies). The purchase method applies to amalgamations in the nature of purchase; proportionate consolidation and the equity method relate to AS 27 and AS 23.
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- Q4Which of the following is NOT a condition for an amalgamation to be classified as an 'amalgamation in the nature of merger' under AS 14?
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