Answer-State which statement is correct:

ExplanationAccording to AS-14 on Amalgamations In case of merger, pooling of interest method is used. In case of purchase, either purchase method or pooling of interest method may be used depending on conditions.

Question

State which statement is correct:

A In case of merger – We use pooling of interest method for accounting.

B In case of purchase – We use purchase method or pooling of interest method depending upon whether it is takeover at agreed values or book values.

C Both (a) and (b) are correct.

D Only (a) is correct.

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Solution