TREATMENT OF PRE AND POST ACQUISITION PROFIT
During life of a business, circumstances can force the organization to dissolve, liquidate etc. There may be another way called ‘’acquisition”. It is the process whereby one business acquires control and ownership into other. The parties in this process can be a company, partnership firm etc. When a company acquires stake of another company then it comes under purview of amalgamation.
In process of acquisition, the resulting entity may be either new or existing. Acquisition transaction can not be held in dark. Acquisition requires compliance of various rules and accounting standards. The accounting of this transaction is governed by accounting standards prescribed by ICAI. Consideration and the mode of the payments etc. are to be decided to complete the acquisition in efficient and in compliance with various regulations.
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Treatment of Pre & Post Acquisition Profit
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