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Accounting - 2 Business is taken over by the transferor...

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Answer:- Business Combination is a Combination of Transactions of two or more company in which one company acquires the control of other company. Acquisition Method is also known as purchase Method. Assets and Liabilities are combined in following steps:- 1. Assets and Liabilities are taken over at Fair Market Value (FMV) except Goodwill. However, If FMV cannot be determined then they are taken over at amount which can be reasonably estimated.
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Unformatted text preview: 2. Business is taken over by the transferor company and it acquires control in the transferee company. 3. Retained Earning, Balance in Profit and loss account of the transferee company is not transferred. 4. Goodwill of the transferee company is not carried forward. Difference between amount paid as consideration and value of assets acquired is transferred to goodwill account....
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