Page 267 - SBR Integrated Workbook STUDENT S18-J19
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Group accounting – Basic groups
Example 4
Business combinations
Banana is a listed entity. It purchased 100% of the share capital of Apple for
cash consideration. Apple, which is not listed, has no liabilities and only one
asset: an office building. The office building had no furniture and no tenants.
At the date of acquisition, Apple had no employees. Banana intends to
refurbish the building and to let it out in order to earn rental income.
Discuss how Banana should account for this transaction.
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