As per Net Asset Method Purchase Consideration is Equal to

The payment made by the transferee company to the transferor company in exchange for the business that was acquired is referred to as Purchase Consideration. It covers all forms of payments, whether they are made in the form of cash, shares, equities, bonds, or other items. Payment to debenture holders or any other external obligations that are assumed and discharged by the Transferee Company is not included in the purchase consideration.

Answer - As per net asset method purchase consideration is equal to the total net assets of the transferor company.

Depending on the terms and conditions agreed upon by the transferor corporation, there are many methods of purchase consideration. The net asset technique is the first. According to this procedure, the total assets and liabilities that the transferee company has acquired are subtracted to determine the net asset value. The value of the assets and liabilities is determined between the two companies and does not appear on the balance sheet.

The net payment method is the second one. The acquisition consideration in this situation is determined by aggregating all dividends paid to transferor company shareholders by the transferee firm. Cash, stock, or debentures are all acceptable forms of payment. The Lump Sum technique comes next. 

When the Transferee Company consents to pay the Transferor Company a set amount of money, this occurs. Just as XYZ Limited consents to pay 25 lakh to ABC Ltd. This lump sum approach. Intrinsic value, sometimes known as the share exchange approach, is the fourth. The following procedure is utilized in this method to compute purchase consideration: Net asset available to the equity shareholders/ number of equity shares.

Summary:

As per Net Asset Method Purchase Consideration is Equal to

As per net asset method purchase consideration is equal to the total net assets of the transferor company.

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