In connection with merger accounting:

(a) Since the issue of FRS 6 'Acquisitions and mergers', under what circumstances may a business combination be accounted for as a merger?

(b) What are the differences between acquisition and merger accounting, as may be seen from a consolidated balance sheet?(6 marks)

(c) The balance sheet of Beta plc at 31 December was:

Alpha plc merges with Beta plc and Alpha plc issues 800 ordinary shares (nominal value 5 p) to acquire 200 shares in Beta plc.
(i) Calculate the merger reserve.
(ii) Under what circumstances could this merger reserve be regarded as realised and available for distribution to Alpha ple's shareholders?

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Ordinary share capital (nominal 1) 200 Revaluation reserve 250 Profit and loss account 350 800 Net assets (at fair values) 800