Under AS 14 (Accounting for Amalgamations), how does the transferee company deal with the transferor’s general reserve in an amalgamation in the nature of purchase?

In an amalgamation in the nature of purchase, AS 14 requires the transferee to record only the assets and liabilities taken over; the transferor’s reserves other than statutory reserves lose their identity, and any difference against the consideration is goodwill or capital reserve. Recording reserves under the same head is the pooling of interests method used for an amalgamation in the nature of merger, and the Amalgamation Adjustment Reserve debit is used only to preserve statutory reserves.