Joint venture:

A joint venture takes place when two parties come together to take on one project. In a joint venture, both parties are equally invested in the project in terms of money, time, and effort to build on the original concept.

Example of joint ventures:

Pakistan state oil and pizza huts joint venture. Indus motor company is a joint venture of house of habib.

Amalgamation:
Amalgamation or amalgam, when used to refer to a fictional character or place, refers to one that was created by combining, or is perceived to be a combination, of several other previously existing characters or locations. To emphasize the origin of their creations, authors or artists may use amalgamated names.

Examples:
Mega City (The Matrix) The City Desk

Absorption:
It is the process in which one existing company takes over the other existing company and merges together as a single unit.

Examples:
Chillers and Heat Pumps

Reconstruction:
If any company is suffering loss and it closes its business and joins with or without other company, it creates new company. That is called reconstruction.

Valuation of Goodwill:
There are three methods of valuation of goodwill of the firm; 1. Average Profits Method 2. Super Profits Method 3. Capitalization Method

Average Profits Method:

Under this method goodwill is calculated on the basis of the average of some agreed number of past years. The average is then multiplied by the agreed number of years. This is the simplest and the most commonly used method of the valuation of goodwill. Goodwill = Average Profits X Number of years of Purchase

Super profits method:

Under this method Goodwill is calculated on the basis of Super Profits i.e. the excess of actual profits over the average profits. For calculating Goodwill:(i) Normal Profits = Capital Invested X Normal rate of return/100 (ii) Super Profits = Actual Profits - Normal Profits (iii) Goodwill = Super Profits x No. of years purchased

Capitalization Method:
There are two ways of calculating Goodwill under this method: (i) Capitalization of Average Profits Method, (ii) Capitalization of Super Profits,

Valuation of Shares:
The shares which are included in the list of stock exchange are quoted but the shares which are not quoted are valued by various methods.

Need for Valuation:(i) When two or more companies amalgamate.

(ii) When absorption of a company takes place.

(iii) When some shareholders do not give their consent for reconstruction of the company, there shares are valued for the purpose of acquisition.

Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests. Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace. In the most frequent instance, a partnership is formed between one or more businesses in which partners (owners) colabor to achieve and share profits and losses. Types of Partners The partners of a firm are broadly divided into three main categories. (1) General Partners. (2) Special Partners. (3) Other Partners. (1) General Partners: Basically all the partners of a firm are general partners. General partners we those whose liability is unlimited in the General partners are of two types (a) Active partner (b) Sleeping partner. (2) Special Partners: Special partners are partners whose liability is limited to the extent of their capital contributed in the firm. They are only found in limited partnership. The special partners cannot take part in the management of the business of the firm. In Pakistan limited partnership is not recognized. (3) Other Partners The other types of partners sometimes found in a firm are as follows. (a) Secret Partner, (b) Nominal Partner, (c) Minor Partner, (d) Partner at Will,

(e) Partners in Profit Only,

International Financial Reporting Standards:

International Financial Reporting Standards (IFRS) are principles-based Standards, Interpretations and the Framework (1989) adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). IAS was issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). On 1 April 2001, the new IASB took over from the IASC the responsibility for setting International Accounting Standards. During its first meeting the new Board adopted existing IAS and SICs. The IASB has continued to develop standards calling the new standards IFRS.

International Accounting Standards IAS:

An older set of standards stating how particular types of transactions and other events should be reflected in financial statements. In the past, international accounting standards (IAS) were issued by the Board of the International Accounting Standards Committee (IASC). Since 2001, the new set of standards has been known as the international financial reporting standards (IFRS) and has been issued by the International Accounting Standards Board (IASB).

Generally Accepted Accounting Principles:

Generally Accepted Accounting Principles (GAAP) is a term used to refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as Accounting Standards. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements.

ACCOUNTING FOR LEASES:

Accounting for Leases is the current accounting standard that regulates and provides guidance as to how to correctly account for and disclose leases and hire purchase agreements.

Finance lease:
A finance lease is a lease that is primarily a method of raising finance to pay for assets, rather than a genuine rental. From an accounting point of view the classification of leases as finance leases is very important. With a finance lease assets must be shown on the balance sheet of the lessee, with the amounts due on the lease also shown on the balance sheet as liabilities. This is intended to prevent the use of lease finance to keep the lease liabilities off-balance sheet.