Which of the following is/are the methods of calculation of purchase consideration? Lump-sum payment…
Under accounting standards for amalgamation and business combinations (AS-14), recognized methods of calculating purchase consideration include the Lump-sum payment method…
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Which of the following is/are the methods of calculation of purchase consideration?
- Lump-sum payment method
- Net asset method
- Total payment method
- Net realization method
- SWAP rate method
Answer and explanation
Correct answer D
Under accounting standards for amalgamation and business combinations (AS-14), recognized methods of calculating purchase consideration include the Lump-sum payment method (A), Net asset method (B), Total/Net payment method (C), and Intrinsic value / Share exchange (SWAP) ratio method (E). Net realization method (D) is used in piecemeal distribution of partnership dissolution, making A, B, C, E only correct.
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UGC NET Commerce