AAR Ltd. is formed to take over the assets and liabilities of ABC Ltd., which is then dissolved. This is an example of:

CA Intermediate · Advanced Accounting · PYQS · January 2026
AAR Ltd. is formed to take over the assets and liabilities of ABC Ltd., which is then dissolved. This is an example of:
(A) Internal reconstruction
(B) Merger
(C) External reconstruction
(D) Absorption

Suggested Answer and Working Notes:

Correct Answer: Option (C)

External reconstruction

Topics: AS 14, Amalgamation of Companies

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