Question

Which of the following features of Amalgamation are in the nature of Merger as per the AS-14? 

(A). Taking over of select few assets and liabilities.
(B). Intention to carry on the acquired business.
(C). Amalgamation Adjustment Account is opened in the books of transferee company to maintain statutory reserves.
(D). Recording of assets and liabilities of transferor company at book values.
 

• A. (B), (C) and (D) only
• B. (B) and (D) only
• C. (A), (B), (C) and (D)
• D. (A), (B) and (C) only

Hint:

Understand the difference between merger and acquisition under AS-14.

Answer 1

The Correct Option is A

Merger characteristics encompass plans to continue operations, retain required reserves, and document asset values as they are. Selective asset assumption is a characteristic of acquisitions.