Скачать или смотреть Purchase Method of Amalgamation | Step-by-Step Example | CA INTER CAPSULE REVISION | JAN 2026

The purchase method is used when the amalgamation is in the nature of purchase i.e., one company acquires another.
Key features of Purchase Method:
Assets and liabilities of the transferor company are recorded at their fair values (or agreed values).
Reserves (like general reserve, P&L balance) are not carried forward, except statutory reserves.
The difference between:
Purchase consideration, and
Net assets acquired
is treated as:
Goodwill (if consideration less than net assets), or
Capital Reserve (if net assets greater than consideration)

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