Is it possible to retain the same characters of various reserves of transferor Companies amalgamation, mergers or demergers as per Standards of Accounting concepts or conventions ? Discuss.

Scheme of merger or amalgamation implies a process where the legal ownership or operational control or other structures of the company are reorganized. The Institute of Chartered Accountants of India (ICAI) has formulated Accounting Standard (AS)-14 'Accounting for Amalgamation'. AS-14 lays down the accounting and disclosure requirements in respect of amalgamation of companies, as well as treatment of resultant of goodwill or reserves. As per AS-14, amalgamation may be either in the nature of merger or in the nature of purchase. In case of amalgamation in the nature of merger, the identity of the reserves is retained and shall be reflected in the financial statements of the Transferee Company in the same form in which they appeared in the balance sheet of the transferor company prior to amalgamation. General reserve of the Transferor Company remains part of general reserve of the Transferee Company and similarly, Capital Reserve or Revaluation Reserve forms part of the Capital or Revaluation Reserve of the Transferee Company. Consequently, reserves available for distribution of dividends prior to amalgamation would also be available for distribution of dividends post amalgamation. Where amalgamation is in the nature of purchase, none of the reserves are retained in the books of the Transferee Company. In other words, none of the reserves are recorded in the books of the Transferee Company. However, only statutory reserves retain the character and recorded in the Balance Sheet of Transferee Company.