Mergers and Amalgamations are part of business strategy for growth in a competitive environment. Successful completion of mergers and amalgamations requires multidisciplinary approach of law, finance and management, besides complicated accounting principles and practices. The article discusses the basic concepts and accounting standards, which are of practical utility for professionals.

The sweeping wave of economic reforms and liberalization has transformed the business scenario all over the world. The most significant development has been the integration of national economies with `market-oriented globalized economy'. The Indian corporate sector is gearing itself for global competition. In such a scenario, corporate restructuring exercise contributes for economic revival and growth. As such, mergers and amalgamation deals have been on the increase for the obvious reasonas that the size of the market shrinks it becomes extremely difficult for all the companies to survive, unless they cut cost and maintain prices. In such a situation, merger eliminates duplication of administrative and marketing expenses. Companies, by merging, reduce the number of competitors and increase their market share. In this context, an attempt is made to discuss the important terms `amalgamation', `merger', `demerger' and `slump sale', and the accounting standards.

In a merger, one of the existing transferor companies merges its identity with another company by transferring its business (assets and liabilities). The shareholders of the transferor company will have substantial shareholding in the merged company. They are allotted shares in the merged company in exchange for the shares held by them in the transferor company as per the agreed exchange ratio.

The Accounting World Magazine, Merger and Amalgamation, Accounting Standards, Economic Reforms, Liberalization, Indian Corporate Sector, Equity Shares, Financial Statements, Accounting Policies, Mergers and Demergers, Indian Companies.