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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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