Forums Accounting How is the Amalgamation adjustment account is shown in balance sheet?

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    kritinidhi
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    How is the Amalgamation adjustment account is shown in balance sheet?

    #16394

    kritinidhi
    Member

    Amalgamation is a union of two or more companies, made with the intention to form a new company. During amalgamation, an account named as amalgamation adjustment account is made. This account is used when there is no adjustment account available. Basically, it is an extra account available for recording the transaction taking place at the time of amalgamation for legal compliance. According to Accounting standard 14 “Accounting for amalgamation” issued by ICAI, an amalgamation adjustment account arises when certain statutory reserves need to be maintained by the transferee company which was previously maintained in the books of transferor company. Examples of statutory reserves are- investment allowance reserves, development rebate reserve, export profits reserves etc.

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