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What is amalgamation and absorption and external reconstruction in accounting?
Wiki User
∙ 14y ago
Absorption:
It is the process in which one existing company takes over the other existing company and merge together as a single unit.
Amalgamation:
It is the process in which two or more existing companies joins together and start new company with new name and identity and dissolves the existing companies.
External Reconstruction:
It is the process in which one existing company reconstruct itself with new name and identity.
Wiki User
∙ 14y ago
Wiki User
∙ 14y agoIt is the process in which one existing company takes over the other existing company and merge together as a single unit.
Amalgamation:
It is the process in which two or more existing companies joins together and start new company with new name and identity and dissolves the existing companies.
External Reconstruction:
It is the process in which one existing company reconstruct itself with new name and identity.
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Difference between amalgamation and absorption and external reconstruction?
Amalgamation involves two or more companies merging to form a new entity where they combine their assets, liabilities, and operations. Absorption is when one company takes over another, with the absorbed company losing its separate identity. External reconstruction involves reorganizing a company's structure or operations, often due to financial difficulties, through methods such as recapitalization or changing the legal form of the company.
What is external reconstruction of companies in accounting?
It is similar to amalgamation though not exactly the same. In external reconstruction a new company is formed for the purpose of taking over the business of an existing sick company which has incurred huge losses and is facing financial difficulties. Existing company is wound up by selling its business to the newly formed company which is generally similarly named and owned by the same shareholders to a great extent.
Distinguish between internal and external reconstruction of a company?
internal reconstruction no new company is formed in external reconstruction an existing company is dissolved and a new company is formed with the same shareholdders. there will be absence of liquidation expenses in internal reconstruction. liquidation expenses is present in external reconstruction.
What is external reconstruction?
It is similar to amalgamation though not exactly the same. In external reconstruction a new company is formed for the purpose of taking over the business of an existing sick company which has incurred huge losses and is facing financial difficulties. Existing company is wound up by selling its business to the newly formed company which is generally similarly named and owned by the same shareholders to a great extent.http://wiki.answers.com/What_is_external_reconstruction_of_companies_in_accounting#ixzz1aT6UQ0cI
How does it benefit external users in accounting principles?
of accounting principles
Is employee an external user of accounting information?
External ueser
Which type of accounting information is intended to satisfy the needs of external users of accounting information?
Financial accounting
What is process of external recontruction?
"External reconstruction" means repairing the outer wall of something.
Internal and External Reporting Requirements?
differentiate between financial Accounting and management accounting
Internal and external accounting information?
internal = inside business external = outside business
Examples of external users of accounting information?
external aiditor,shareholder,goverment etc
What is the difference between wicking and absorption?
Wicking is a kind of absorption, in which capillary pressure is the only cause. The absorption may happen by external pressure and/or capillary pressure.
