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

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?
B) WX purchases 25,000 of ST's $1 equity shares.
A) WX purchases 15,000 of ST's $1 equity shares and 20,000 of ST's $1 preference shares.
C) WX purchases 75,000 of ST's $1 equity shares.
D) WX purchases 50,000 of ST's $1 preference shares.

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?

Show Suggested Answer Hide Answer
Suggested Answer: B

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

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Vesta
7 hours ago
25,000 shares is just 25% ownership.
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Fatima
5 days ago
I think option C is the only one that qualifies!
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Raymon
11 days ago
WX needs at least 20% ownership for an associate investment.
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Jacklyn
16 days ago
I feel like option B could also be a contender if it meets the influence criteria, but I’m not confident about the exact numbers needed for associates.
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Gregoria
2 months ago
I practiced a similar question where the ownership percentage was key, but I can't recall if preference shares count towards that percentage.
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Shawn
2 months 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.
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Raelene
2 months 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.
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