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.
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.
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.
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
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.
of accounting principles
External ueser
Financial accounting
"External reconstruction" means repairing the outer wall of something.
differentiate between financial Accounting and management accounting
external aiditor,shareholder,goverment etc
internal = inside business external = outside business
The accounting process is concerned with both: internal and external transactions representing economic events.