The action or process of uniting or merging two or more things
It is defined as the combination of one or more companies into a new entity. It includes:
The process in which one powerful company takes control of the weaker company.
This leads to a much stronger and larger customer base, which also means the newly formed entity has more assets.
Types of Amalgamation:
If the purchase consideration exceeds the net asset value (NAV), the excess amount is recorded as goodwill.
If not, it is recorded as capital reserves.