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Methods of Amalgamation – Quiz To Test Yourself !

Methods Of Amalgamation

The term “amalgam” means to unite or to combine. Generally, the term ‘amalgamation’ is used when two or more existing companies go into liquidation and a new company is formed to take over their business. The term ‘absorption’ is used when one or more existing companies go into liquidation and one existing company takes over or purchases the businesses of all companies. However, the difference between amalgamation and absorption has been dispensed with by the Accounting Standard (AS-14) – Accounting for Amalgamations issued by the ICAI. Thus the term includes absorption.

Therefore, it means liquidation of two or more companies to form a new company or liquidation of

one or more company by takeover by one of the existing company. There are different methods of amalgamation.

Here is a quiz to test yourself.

Comment ( 1 )

  1. […] Accounting standards are noting but principles of accounting. The term ‘Standards’ in place of ‘principles’ was introduced by the British when they set up their Accounting Standards Steering Committee in 1969.Later in 1973, the ‘Standard’ was also adopted by Americans. The institute of Chartered Accountants of India (ICAI) set up Accounting Standards Board (ABS) in the year 1977 and since then the term standard is in use and has become popular in India. The main function of ABS is to formulate accounting standards after considering applicable laws, usages, customs and prevailing environment. Click here for quiz on Methods of Amalgamation […]

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