IAS 14

Accounting Standard (AS) 14

(issued 1994)

Accounting for Amalgamations

Contents

INTRODUCTION Paragraphs 1-3

Definitions 3

EXPLANATION 4-27

Types of Amalgamations 4-6

Methods of Accounting for Amalgamations 7-13

The Pooling of Interests Method 10-11

The Purchase Method 12-13

Consideration 14-15

Treatment of Reserves on Amalgamation 16-18

Treatment of Goodwill Arising on Amalgamation 19-20

Balance of Profit and Loss Account 21-22

Treatment of Reserves Specified in A Scheme of

Amalgamation 23

Disclosure 24-26

Amalgamation after the Balance Sheet Date 27

ACCOUNTING STANDARD 28-46

The Pooling of Interests Method 33-35

The Purchase Method 36-39

Continued../. .

199

Common Procedures 40-41

Treatment of Reserves Specified in A Scheme of

Amalgamation 42

Disclosure 43-45

Amalgamation after the Balance Sheet Date 46

The following Accounting Standards Interpretation (ASI) relates to AS 14

also, although it was issued in the context ofAS 22, ‘Accounting for Taxes

on Income’:

 ASI 11 - Accounting for Taxes on Income in case of an

Amalgamation

The above Interpretation is published elsewhere in this Compendium.

180 AS 14 (issued 1994)

Accounting Standard (AS) 14*

(issued 1994)

Accounting forAmalgamations

(This Accounting Standard includes paragraphs 28-46 set in bold italic

type and paragraphs 1-27 set in plain type, which have equal authority.

Paragraphs in bold italic type indicate the main principles. This

Accounting Standard should be read in the context of the Preface to the

Statements of Accounting Standards1.)

The following is the text ofAccounting Standard (AS) 14, ‘Accounting

for Amalgamations’, issued by the Council of the Institute of Chartered

Accountants of India.

This standard will come into effect in respect of accounting periods

commencing on or after 1.4.1995 and will be mandatory in nature.2 The

Guidance Note on Accounting Treatment of Reserves in Amalgamations

issued by the Institute in 1983 will stand withdrawn from the aforesaid

date.

Introduction

1. This statement deals with accounting for amalgamations and the

treatment of any resultant goodwill or reserves. This statement is directed

principally to companies although some of its requirements also apply to

financial statements of other enterprises.

2. This statement does not deal with cases of acquisitions which arise

when there is a purchase by one company (referred to as the acquiring

* A limited revision to this Standard has been made in 2004, pursuant to which

paragraphs 23 and 42 of this Standard have been revised (see footnotes 4 and 8).

1 Attention is specifically drawn to paragraph 4.3 of the Preface, according to which

Accounting Standards are intended to apply only to items which are material.

2 Reference may be made to the section titled ‘Announcements of the Council

regarding status of various documents issued by the Institute of Chartered

Accountants of India’ appearing at the beginning of this Compendium for a detailed

discussion on the implications of the mandatory status of an accounting standard.

Accounting for Amalgamations 201

company) of the whole or part of the shares, or the whole or part of the

assets, of another company (referred to as the acquired company) in

consideration for payment in cash or by issue of shares or other securities in

the acquiring company or partly in one form and partly in the other. The

distinguishing feature of an acquisition is that the acquired company is not

dissolved and its separate entity continues to exist.

Definitions

3. The following terms are used in this statement with the meanings

specified:

(a) Amalgamation means an amalgamation pursuant to the

provisions of the CompaniesAct, 1956 or any other statutewhich

may be applicable to companies.

(b) Transferor company means the company which is amalgamated

into another company.

(c) Transferee company means the company into which a transferor

company is amalgamated.

(d) Reserve means the portion of earnings, receipts or other surplus

of an enterprise (whether capital or revenue) appropriated by the

management for a general or a specific purpose other than a

provision for depreciation or diminution in the value of assets or

for a known liability.

(e) Amalgamation in the nature of merger is an amalgamation

which satisfies all the following conditions.

(i) All the assets and liabilities of the transferor company

become, after amalgamation, the assets and liabilities of the

transferee company.

(ii) Shareholders holding not less than 90%of the face value of

the equity shares of the transferor company (other than the

equity shares already held therein, immediately before the

amalgamation, by the transferee company or its subsidiaries

or their nominees) become equity shareholders of the

transferee company by virtue of the amalgamation.

202 AS 14 (issued 1994)

(iii) The consideration for the amalgamation receivable by those

equity shareholders of the transferor company who agree

to become equity shareholders of the transferee company

is discharged by the transferee companywholly by the issue

of equity shares in the transferee company, except that cash

may be paid in respect of any fractional shares.

(iv) The business of the transferor company is intended to be

carried on, after the amalgamation, by the transferee

company.

(v) No adjustment is intended to be made to the book values of

the assets and liabilities of the transferor company when

they are incorporated in the financial statements of the

transferee company except to ensure uniformity of

accounting policies.

(f) Amalgamation in the nature of purchase is an amalgamation

which does not satisfy any one ormore of the conditions specified

in sub-paragraph (e) above.

(g) Consideration for the amalgamation means the aggregate of the

shares and other securities issued and the payment made in the

form of cash or other assets by the transferee company to the

shareholders of the transferor company.

(h) Fair value is the amount for which an asset could be exchanged

between a knowledgeable, willing buyer and a knowledgeable,

willing seller in an arm’s length transaction.

(i) Pooling of interests is a method of accounting for

amalgamations the object of which is to account for the

amalgamation as if the separate businesses of the amalgamating

companies were intended to be continued by the transferee

company. Accordingly, only minimal changes are made in

aggregating the individual financial statements of the

amalgamating companies.

Explanation

Accounting for Amalgamations 203

Types of Amalgamations

4. Generally speaking, amalgamations fall into two broad categories. In

the first category are those amalgamations where there is a genuine pooling

not merely of the assets and liabilities of the amalgamating companies but

also of the shareholders’ interests and of the businesses of these companies.

Such amalgamations are amalgamations which are in the nature of ‘merger’

and the accounting treatment of such amalgamations should ensure that the

resultant figures of assets, liabilities, capital and reserves more or less

represent the sum of the relevant figures of the amalgamating companies. In

the second category are those amalgamations which are in effect a mode by

which one company acquires another company and, as a consequence, the

shareholders of the company which is acquired normally do not continue to

have a proportionate share in the equity of the combined company, or the

business of the company which is acquired is not intended to be continued.

Such amalgamations are amalgamations in the nature of ‘purchase’.

5. An amalgamation is classified as an ‘amalgamation in the nature of

merger’ when all the conditions listed in paragraph 3(e) are satisfied. There

are, however, differing views regarding the nature of any further conditions

that may apply. Some believe that, in addition to an exchange of equity

shares, it is necessary that the shareholders of the transferor company obtain

a substantial share in the transferee company even to the extent that it should

not be possible to identify any one party as dominant therein. This belief is

based in part on the view that the exchange of control of one company for an

insignificant share in a larger company does not amount to a mutual sharing

of risks and benefits.

6. Others believe that the substance of an amalgamation in the nature of

merger is evidenced by meeting certain criteria regarding the relationship of

the parties, such as the former independence of the amalgamating

companies, the manner of their amalgamation, the absence of planned

transactions that would undermine the effect of the amalgamation, and the

continuing participation by themanagement of the transferor company in the

management of the transferee company after the amalgamation.

204 AS 14 (issued 1994)

Methods of Accounting for Amalgamations

7. There are two main methods of accounting for amalgamations:

(a) the pooling of interests method; and

(b) the purchase method.

8. The use of the pooling of interests method is confined to circumstances

which meet the criteria referred to in paragraph 3(e) for an amalgamation in

the nature of merger.

9. The object of the purchase method is to account for the amalgamation

by applying the same principles as are applied in the normal purchase of

assets. This method is used in accounting for amalgamations in the nature of

purchase.

The Pooling of Interests Method

10. Under the pooling of interests method, the assets, liabilities and

reserves of the transferor company are recorded by the transferee company

at their existing carrying amounts (after making the adjustments required in

paragraph 11).

11. If, at the time of the amalgamation, the transferor and the transferee

companies have conflicting accounting policies, a uniformset of accounting

policies is adopted following the amalgamation. The effects on the financial

statements of any changes in accounting policies are reported in accordance

with Accounting Standard (AS) 5, ‘Prior Period and Extraordinary Items

and Changes in Accounting Policies’.3

The Purchase Method

12. Under the purchase method, the transferee company accounts for the

amalgamation either by incorporating the assets and liabilities at their existing

carrying amounts or by allocating the consideration to individual identifiable

assets and liabilities of the transferor company on the basis of their fair

values at the date of amalgamation. The identifiable assets and liabilities

may include assets and liabilities not recorded in the financial statements of

the transferor company.

3 AS 5 has been revised in February 1997. The title of revised AS 5 is ‘Net Profit or

Loss for the Period, Prior Period Items and Changes in Accounting Policies’.

Accounting for Amalgamations 205

13. Where assets and liabilities are restated on the basis of their fair

values, the determination of fair values may be influenced by the intentions

of the transferee company. For example, the transferee company may have

a specialised use for an asset,which is not available to other potential buyers.

The transferee company may intend to effect changes in the activities of the

transferor company which necessitate the creation of specific provisions for

the expected costs, e.g. planned employee termination and plant relocation

costs.

Consideration

14. The consideration for the amalgamation may consist of securities, cash

or other assets. In determining the value of the consideration, an assessment

is made of the fair value of its elements. A variety of techniques is applied in

arriving at fair value. For example, when the consideration includes

securities, the value fixed by the statutory authorities may be taken to be the

fair value. In case of other assets, the fair value may be determined by

reference to the market value of the assets given up. Where the market

value of the assets given up cannot be reliably assessed, such assets may be

valued at their respective net book values.

15. Many amalgamations recognise that adjustments may have to be made

to the consideration in the light of one or more future events. When the

additional payment is probable and can reasonably be estimated at the date

of amalgamation, it is included in the calculation of the consideration. In all

other cases, the adjustment is recognised as soon as the amount is

determinable [see Accounting Standard (AS) 4, Contingencies and Events

Occurring After the Balance Sheet Date].

Treatment of Reserves on Amalgamation

16. If the amalgamation is an ‘amalgamation in the nature of merger’, the

identity of the reserves is preserved and they appear in the financial

statements of the transferee company in the same form in which they

appeared in the financial statements of the transferor company. Thus, for

example, the General Reserve of the transferor company becomes the

General Reserve of the transferee company, the Capital Reserve of the

transferor company becomes the Capital Reserve of the transferee company

and the Revaluation Reserve of the transferor company becomes the

Revaluation Reserve of the transferee company. As a result of preserving

206 AS 14 (issued 1994)

the identity, reserves which are available for distribution as dividend before

the amalgamation would also be available for distribution as dividend after

the amalgamation. The difference between the amount recorded as share

capital issued (plus any additional consideration in the formof cash or other

assets) and the amount of share capital of the transferor company is adjusted

in reserves in the financial statements of the transferee company.

17. If the amalgamation is an ‘amalgamation in the nature of purchase’,

the identity of the reserves, other than the statutory reserves dealt with in

paragraph 18, is not preserved. The amount of the consideration is deducted

from the value of the net assets of the transferor company acquired by the

transferee company. If the result of the computation is negative, the

difference is debited to goodwill arising on amalgamation and dealt with in

the manner stated in paragraphs 19-20. If the result of the computation is

positive, the difference is credited to Capital Reserve.

18. Certain reserves may have been created by the transferor company

pursuant to the requirements of, or to avail of the benefits under, the Incometax

Act, 1961; for example, Development Allowance Reserve, or

Investment Allowance Reserve. The Act requires that the identity of the

reserves should be preserved for a specified period. Likewise, certain other

reserves may have been created in the financial statements of the transferor

company in terms of the requirements of other statutes.Though, normally, in

an amalgamation in the nature of purchase, the identity of reserves is not

preserved, an exception is made in respect of reserves of the aforesaid

nature (referred to hereinafter as ‘statutory reserves’) and such reserves

retain their identity in the financial statements of the transferee company in

the same form in which they appeared in the financial statements of the

transferor company, so long as their identity is required to be maintained to

comply with the relevant statute. This exception is made only in those

amalgamations where the requirements of the relevant statute for recording

the statutory reserves in the books of the transferee company are complied

with. In such cases the statutory reserves are recorded in the financial

statements of the transferee company by a corresponding debit to a suitable

account head (e.g., ‘Amalgamation Adjustment Account’) which is

disclosed as a part of ‘miscellaneous expenditure’ or other similar category

in the balance sheet.When the identity of the statutory reserves is no longer

required to be maintained, both the reserves and the aforesaid account are

reversed.

Accounting for Amalgamations 207

Treatment of Goodwill Arising on Amalgamation

19. Goodwill arising on amalgamation represents a payment made in

anticipation of future income and it is appropriate to treat it as an asset to be

amortised to income on a systematic basis over its useful life. Due to the

nature of goodwill, it is frequently difficult to estimate its useful life with

reasonable certainty. Such estimation is, therefore, made on a prudent basis.

Accordingly, it is considered appropriate to amortise goodwill over a period

not exceeding five years unless a somewhat longer period can be justified.

20. Factors which may be considered in estimating the useful life of

goodwill arising on amalgamation include:

• the foreseeable life of the business or industry;

• the effects of product obsolescence, changes in demand and

other economic factors;

• the service life expectancies of key individuals or groups of

employees;

• expected actions by competitors or potential competitors; and

• legal, regulatory or contractual provisions affecting the useful life.

Balance of Profit and Loss Account

21. In the case of an ‘amalgamation in the nature of merger’, the balance

of the Profit and Loss Account appearing in the financial statements of the

transferor company is aggregated with the corresponding balance appearing

in the financial statements of the transferee company. Alternatively, it is

transferred to the General Reserve, if any.

22. In the case of an ‘amalgamation in the nature of purchase’, the balance

of the Profit and Loss Account appearing in the financial statements of the

transferor company, whether debit or credit, loses its identity.

Treatment of Reserves Specified in A Scheme of

Amalgamation

23. The scheme of amalgamation sanctioned under the provisions of the

208 AS 14 (issued 1994)

Companies Act, 1956 or any other statute may prescribe the treatment to be

given to the reserves of the transferor company after its amalgamation.

Where the treatment is so prescribed, the same is followed. In some cases,

the scheme of amalgamation sanctioned under a statute may prescribe a

different treatment to be given to the reserves of the transferor company

after amalgamation as compared to the requirements of this Statement that

would have been followed had no treatment been prescribed by the scheme.

In such cases, the following disclosures are made in the first financial

statements following the amalgamation:

(a) A description of the accounting treatment given to the reserves

and the reasons for following the treatment different from that

prescribed in this Statement.

(b) Deviations in the accounting treatment given to the reserves as

prescribed by the scheme of amalgamation sanctioned under the

statute as compared to the requirements of this Statement that

would have been followed had no treatment been prescribed by

the scheme.

(c) The financial effect, if any, arising due to such deviation.4

Disclosure

24. For all amalgamations, the following disclosures are considered

appropriate in the first financial statements following the amalgamation:

(a) names and general nature of business of the amalgamating

companies;

(b) effective date of amalgamation for accounting purposes;

4 As a limited revision to AS 14, the Council of the Institute decided to revise this

paragraph in 2004. This revision comes into effect in respect of accounting periods

commencing on or after 1-4-2004. General Clarification (GC) - 4/2002 on AS 14, issued

by the Accounting Standards Board in June 2002, stands withdrawn from that

date

(See ‘The Chartered Accountant’, February 2004, pp. 816). The erstwhile paragraph

was as under:

“23 The scheme of amalgamation sanctioned under the provisions of the Companies

Act, 1956 or any other statute may prescribe the treatment to be given to the reserves

of the transferor company after its amalgamation. Where the treatment is so prescribed,

the same is followed.”

Accounting for Amalgamations 209

(c) the method of accounting used to reflect the amalgamation; and

(d) particulars of the scheme sanctioned under a statute.

25. For amalgamations accounted for under the pooling of interests

method, the following additional disclosures are considered appropriate in

the first financial statements following the amalgamation:

(a) description and number of shares issued, together with the

percentage of each company’s equity shares exchanged to effect

the amalgamation;

(b) the amount of any difference between the consideration and the

value of net identifiable assets acquired, and the treatment

thereof.

26. For amalgamations accounted for under the purchase method, the

following additional disclosures are considered appropriate in the first

financial statements following the amalgamation:

(a) consideration for the amalgamation and a description of the

consideration paid or contingently payable; and

(b) the amount of any difference between the consideration and the

value of net identifiable assets acquired, and the treatment

thereof including the period of amortisation of any goodwill arising

on amalgamation.

Amalgamation after the Balance Sheet Date

27. When an amalgamation is effected after the balance sheet date but

before the issuance of the financial statements of either party to the

amalgamation, disclosure is made in accordance with AS 4, ‘Contingencies

and Events Occurring After the Balance Sheet Date’, but the amalgamation

is not incorporated in the financial statements. In certain circumstances, the

amalgamationmay also provide additional information affecting the financial

statements themselves, for instance, by allowing the going concern

assumption to be maintained.

210 AS 14 (issued 1994)

Accounting Standard

28. An amalgamation may be either –

(a) an amalgamation in the nature of merger, or

(b) an amalgamation in the nature of purchase.

29. An amalgamation should be considered to be an amalgamation in

the nature of merger when all the following conditions are satisfied:

(i) All the assets and liabilities of the transferor company

become, after amalgamation, the assets and liabilities of the

transferee company.

(ii) Shareholders holding not less than 90% of the face value of

the equity shares of the transferor company (other than the

equity shares already held therein, immediately before the

amalgamation, by the transferee company or its subsidiaries

or their nominees) become equity shareholders of the

transferee company by virtue of the amalgamation.

(iii) The consideration for the amalgamation receivable by those

equity shareholders of the transferor company who agree to

become equity shareholders of the transferee company is

discharged by the transferee company wholly by the issue of

equity shares in the transferee company, except that cash

may be paid in respect of any fractional shares.

(iv) The business of the transferor company is intended to be

carried on, after the amalgamation, by the transferee

company.

(v) No adjustment is intended to be made to the book values of

the assets and liabilities of the transferor company when they

are incorporated in the financial statements of the transferee

company except to ensure uniformity of accounting policies.

30. An amalgamation should be considered to be an amalgamation in

the nature of purchase, when any one or more of the conditions

specified in paragraph 29 is not satisfied.

Accounting for Amalgamations 211

31. When an amalgamation is considered to be an amalgamation in

the nature of merger, it should be accounted for under the pooling

of interests method described in paragraphs 33–35.

32. When an amalgamation is considered to be an amalgamation in

the nature of purchase, it should be accounted for under the purchase

method described in paragraphs 36–39.

The Pooling of Interests Method5

33. In preparing the transferee company’s financial statements, the

assets, liabilities and reserves (whether capital or revenue or arising on

revaluation) of the transferor company should be recorded at their

existing carrying amounts and in the same form as at the date of the

amalgamation. The balance of the Profit and Loss Account of the

transferor company should be aggregated with the corresponding

balance of the transferee company or transferred to the General

Reserve, if any.

34. If, at the time of the amalgamation, the transferor and the

transferee companies have conflicting accounting policies, a uniform

set of accounting policies should be adopted following the

amalgamation. The effects on the financial statements of any changes

in accounting policies should be reported in accordance with

Accounting Standard (AS) 5 ‘Prior Period and Extraordinary Items

and Changes in Accounting Policies’.6

35. The difference between the amount recorded as share capital

issued (plus any additional consideration in the form of cash or other

assets) and the amount of share capital of the transferor company

should be adjusted in reserves.

The Purchase Method7

36. In preparing the transferee company’s financial statements, the

assets and liabilities of the transferor company should be incorporated

5 For accounting for taxes on income in case of an amalgamation, see Accounting

Standards Interpretation (ASI) 11, published elsewhere in this Compendium.

6 AS 5 has been revised in February 1997. The title of revised AS 5 is ‘Net Profit or

Loss for the Period, Prior Period Items and Changes in Accounting Policies’.

7 See footnote 5.

212 AS 14 (issued 1994)

at their existing carrying amounts or, alternatively, the consideration

should be allocated to individual identifiable assets and liabilities on the

basis of their fair values at the date of amalgamation. The reserves

(whether capital or revenue or arising on revaluation) of the transferor

company, other than the statutory reserves, should not be included in

the financial statements of the transferee company except as stated in

paragraph 39.

37. Any excess of the amount of the consideration over the value of

the net assets of the transferor company acquired by the transferee

company should be recognised in the transferee company’s

financial statements as goodwill arising on amalgamation. If the

amount of the consideration is lower than the value of the net

assets acquired, the difference should be treated as Capital Reserve.

38. The goodwill arising on amalgamation should be amortised to

income on a systematic basis over its useful life. The amortisation

period should not exceed five years unless a somewhat longer period

can be justified.

39. Where the requirements of the relevant statute for recording the

statutory reserves in the books of the transferee company are complied

with, statutory reserves of the transferor company should be recorded

in the financial statements of the transferee company. The

corresponding debit should be given to a suitable account head (e.g.,

‘Amalgamation Adjustment Account’) which should be disclosed as a

part of ‘miscellaneous expenditure’ or other similar category in the

balance sheet. When the identity of the statutory reserves is no longer

required to be maintained, both the reserves and the aforesaid account

should be reversed.

Common Procedures

40. The consideration for the amalgamation should include any noncash

element at fair value. In case of issue of securities, the value fixed

by the statutory authorities may be taken to be the fair value. In case of

other assets, the fair value may be determined by reference to the

market value of the assets given up. Where the market value of the

assets given up cannot be reliably assessed, such assets may be valued

at their respective net book values.

Accounting for Amalgamations 213

41. Where the scheme of amalgamation provides for an adjustment to

the consideration contingent on one or more future events, the amount

of the additional payment should be included in the consideration if

payment is probable and a reasonable estimate of the amount can be

made. In all other cases, the adjustment should be recognised as soon

as the amount is determinable [see Accounting Standard (AS) 4,

Contingencies and Events Occurring After the Balance Sheet Date].

Treatment of Reserves Specified in A Scheme of

Amalgamation

42. Where the scheme of amalgamation sanctioned under a statute

prescribes the treatment to be given to the reserves of the transferor

company after amalgamation, the same should be followed. Where the

scheme of amalgamation sanctioned under a statute prescribes a

different treatment to be given to the reserves of the transferor company

after amalgamation as compared to the requirements of this Statement

that would have been followed had no treatment been prescribed by the

scheme, the following disclosures should be made in the first financial

statements following the amalgamation:

(a) A description of the accounting treatment given to tbe

reserves and the reasons for following the treatment different

from that prescribed in this Statement.

(b) Deviations in the accounting treatment given to the reserves

as prescribed by the scheme of amalgamation sanctioned

under the statute as compared to the requirements of this

Statement that would have been followed had no treatment

been prescribed by the scheme.

(c) The financial effect, if any, arising due to such deviation.8

8 As a limited revision to AS 14, the Council of the Institute decided to revise

this paragraph in 2004. This revision comes into effect in respect of accounting

periods commencing on or after 01-04-2004. General Clarification (GC) - 4/2002 on

AS 14, issued by the Accounting Standards Board in June 2002, stands withdrawn

from that

date (See ‘The Chartered Accountant’ February 2004, pp. 816). The erstwhile

paragraph was as under:

“42. Where the scheme of amalgamation sanctioned under a statute prescribes

the treatment to be given to the reserves of the transferor company after

amalgamation, the same should be followed.”

214 AS 14 (issued 1994)

Disclosure

43. For all amalgamations, the following disclosures should be made

in the first financial statements following the amalgamation:

(a) names and general nature of business of the amalgamating

companies;

(b) effective date of amalgamation for accounting purposes;

(c) the method of accounting used to reflect the amalgamation;

and

(d) particulars of the scheme sanctioned under a statute.

44. For amalgamations accounted for under the pooling of interests

method, the following additional disclosures should be made in the first

financial statements following the amalgamation:

(a) description and number of shares issued, together with the

percentage of each company’s equity shares exchanged to

effect the amalgamation;

(b) the amount of any difference between the consideration and

the value of net identifiable assets acquired, and the

treatment thereof.

45. For amalgamations accounted for under the purchase method,

the following additional disclosures should be made in the first financial

statements following the amalgamation:

(a) consideration for the amalgamation and a description of the

consideration paid or contingently payable; and

(b) the amount of any difference between the consideration and

the value of net identifiable assets acquired, and the

treatment thereof including the period of amortisation of any

goodwill arising on amalgamation.

Amalgamation after the Balance Sheet Date

46. When an amalgamation is effected after the balance sheet date

Accounting for Amalgamations 215

but before the issuance of the financial statements of either party to the

amalgamation, disclosure should be made in accordance with AS 4,

‘Contingencies and Events Occurring After the Balance Sheet Date’,

but the amalgamation should not be incorporated in the financial

statements. In certain circumstances, the amalgamation may also

provide additional information affecting the financial statements

themselves, for instance, by allowing the going concern assumption to

be maintained.