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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.
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Difference between amalgamation and absorption and external reconstruction?
1.Definition amalgamation where two or more companies doing similar business go into liquidation and a new company is formed . Absorption when existing company purchase another existing company is known as absorption.
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.
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
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.
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
Examples of external users of accounting information?
external aiditor,shareholder,goverment etc
Internal and external accounting information?
internal = inside business external = outside business
The accounting process is concerned with internal and external transactions representing economic events?
The accounting process is concerned with both: internal and external transactions representing economic events.
