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      Question

      Company A absorbs Company B. Purchase consideration is

      settled partly in cash and partly in shares. Which accounting method is used if the takeover is in the nature of merger?
      A Purchase method Correct Answer Incorrect Answer
      B Pooling of interest method Correct Answer Incorrect Answer
      C Fair value method Correct Answer Incorrect Answer
      D Equity method Correct Answer Incorrect Answer

      Solution

      As per AS-14, in amalgamation in the nature of merger, the pooling of interest method is used.

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