Bigger n' Better Pty Ltd has just acquired the Tiny Tots business. The fair value of Tiny

Question:

Bigger n' Better Pty Ltd has just acquired the Tiny Tots business. The fair value of Tiny Tots' net assets as at the date of acquisition is $1 855 000. Bigger n' Better Pty Ltd has agreed to pay the owners of Tiny Tots $1 000 000 in cash and give them 100 000 shares in Bigger n' Better Pty Ltd valued at $10 per share. Calculate the that would be recognised in Bigger n' Better PtyLtd's immediately after the acquisition. How will this be treated subsequent to its recognition?
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