CIMAPRA19-F01-1 Exam - Topic 2 Question 125 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 125
Topic #: 2

[All CIMAPRA19-F01-1 Questions]

WX is considering an investment in ST.

At 31 December 20X2 ST had the following balances in its statement of financial position:

Which of the following would cause ST to become an associate investment of WX?

AWX purchases 15,000 of ST's $1 equity shares and 20,000 of ST's $1 preference shares.

BWX purchases 25,000 of ST's $1 equity shares.

CWX purchases 75,000 of ST's $1 equity shares.

DWX purchases 50,000 of ST's $1 preference shares.

Show Suggested Answer

Suggested Answer: B

by Edna at May 07, 2026, 05:28 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F01-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Gregoria

14 days ago

I practiced a similar question where the ownership percentage was key, but I can't recall if preference shares count towards that percentage.

upvoted 0 times

...

Shawn

19 days ago

I think option C makes the most sense since purchasing 75,000 equity shares should definitely give WX significant influence, but I need to double-check the thresholds for associates.

upvoted 0 times

...

Raelene

24 days ago

I remember that an associate investment typically requires at least 20% ownership, but I'm not sure if that applies to both equity and preference shares.

upvoted 0 times

...