merger reserve
The availability of merger relief is an essential prerequisite for merger accounting; the reverse is not, however, the case and it is possible to obtain merger relief while acquisition accounting. Where this is the case, the premium on the issue of the bidder consideration shares is instead credited to a non-statutory merger reserve, which is not subject to the restrictions on the use of the share premium account in the Companies Act 1985 and can be used to write off goodwill arising on acquisitions.
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Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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  • merger capital reserve — merger reserve …   Accounting dictionary

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  • share premium account — That part of shareholders funds (shown separately on the balance sheet) formed of the premium paid for new shares above their nominal value. It forms part of a company s non distributable reserves. Related links merger reserve Practical Law… …   Law dictionary

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