On 1 October 2022, Shikipisha, a listed company, purchased 90% of the ordinary  shares of Allan. Allan, which ceased trading one week prior to the share purchase,  owns a manufacturing facility comprising of land and buildings as well as related  equipment. The fair value of the land and buildings is similar to the fair value of the  equipment. The acquisition of Allan only gained legal approval on the basis that all  employees who worked at the facility are retained. There are no other assets, including  any inventories, or processes transferred as part of the sale. Shikipisha proposes to  account for the purchase of Allan as a business combination.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On 1 October 2022, Shikipisha, a listed company, purchased 90% of the ordinary 
shares of Allan. Allan, which ceased trading one week prior to the share purchase, 
owns a manufacturing facility comprising of land and buildings as well as related 
equipment. The fair value of the land and buildings is similar to the fair value of the 
equipment. The acquisition of Allan only gained legal approval on the basis that all 
employees who worked at the facility are retained. There are no other assets, including 
any inventories, or processes transferred as part of the sale. Shikipisha proposes to 
account for the purchase of Allan as a business combination. 

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