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CIMAPRA19-F01-1 Exam - Topic 3 Question 119 Discussion

DE purchased an asset on 1 January 20X1 for $60,000 with a useful economic life of six years and a residual value of $3,000.DE uses straight line depreciation for this asset.On 31 December 20X3 the asset has a value in use of $ $28,000 and a fair value of $26,000.Which of the following values should be used for the asset in DE's statement of financial position as at 31 December 20X3?
A) $28,000
B) $26,000
C) $30,000
D) $31,500

CIMAPRA19-F01-1 Exam - Topic 3 Question 119 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 119
Topic #: 3
[All CIMAPRA19-F01-1 Questions]

DE purchased an asset on 1 January 20X1 for $60,000 with a useful economic life of six years and a residual value of $3,000.

DE uses straight line depreciation for this asset.

On 31 December 20X3 the asset has a value in use of $ $28,000 and a fair value of $26,000.

Which of the following values should be used for the asset in DE's statement of financial position as at 31 December 20X3?

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Suggested Answer: A

by Sina at Nov 20, 2025, 07:24 PM

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Darnell
4 months ago
$28,000 makes sense. It shows the asset's potential.
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Melissa
4 months ago
I agree with $26,000. Fair value reflects market conditions.
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Elmira
4 months ago
$30,000 seems off. Depreciation needs to be considered.
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Galen
4 months ago
Totally agree, $30,000 makes the most sense here!
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Vincent
4 months ago
Wait, how can the value in use be higher than fair value?
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Cheryl
4 months ago
Definitely should go with $30,000!
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Alyce
5 months ago
Depreciation, fair value, value in use... this exam is making my head spin! I just want to get this over with and go home.
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Vivan
5 months ago
Haha, you all are overthinking this. The answer is obviously A. Just go with the value in use, it's the most up-to-date and relevant figure.
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Miss
5 months ago
C'mon, guys, it's clearly D. The asset's carrying amount should be $31,500 based on the straight-line depreciation calculation.
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Orville
6 months ago
Hmm, I'm not sure about that. Wouldn't the value in use of $28,000 be a better representation of the asset's worth?
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Kaitlyn
6 months ago
I think the answer is B. The fair value of the asset is $26,000, which seems like the most appropriate value to use in the statement of financial position.
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Cristy
6 months ago
I feel like the answer might be $26,000 since it’s the fair value, but I’m not completely confident. What if the value in use is more relevant?
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Keneth
6 months ago
I’m a bit confused about how to calculate the carrying amount. I know it’s the cost minus accumulated depreciation, but I can’t recall the exact figures for this asset.
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Hayley
6 months ago
I remember practicing a similar question where we had to choose between fair value and carrying amount. I think fair value is usually the right choice.
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Selma
6 months ago
I think we need to consider both the value in use and fair value, but I'm not sure which one takes precedence.
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Beula
7 months ago
Ugh, depreciation questions are the worst. But I'll tackle this methodically. First, I'll calculate the carrying amount, then compare it to the other values given. Hopefully, I can eliminate a few options and make an educated guess.
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Chantay
7 months ago
This seems straightforward enough. I just need to apply the straight-line depreciation formula, compare the resulting carrying amount to the value in use and fair value, and select the appropriate answer. I've got this!
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Mindy
7 months ago
I'm a bit confused on this one. Do we use the value in use or the fair value? Or is there some other factor I'm missing? I better re-read the question carefully and make sure I understand the requirements.
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Berry
7 months ago
I prefer $26,000. Fair value is more reliable.
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Jaime
7 months ago
I think it should be $28,000. Value in use is higher.
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Susana
7 months ago
The asset's carrying amount is $30,000 after 3 years of depreciation.
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Angelyn
8 months ago
$31,500? No way, that’s too high for this asset.
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Jacinta
8 months ago
I thought fair value was always the go-to, but this is tricky!
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Sharen
8 months ago
Okay, I think I can handle this. The key is to determine the appropriate value to use in the statement of financial position based on the asset's carrying amount, value in use, and fair value. I'll work through the calculations step-by-step.
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Yong
8 months ago
Hmm, this looks like a tricky depreciation question. I'll need to carefully calculate the asset's carrying value based on the straight-line method and then compare that to the value in use and fair value provided.
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Glendora
3 months ago
Exactly! The lower value should be used in the statement.
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Hershel
3 months ago
But we need to compare that with the value in use and fair value.
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Terina
3 months ago
So, after three years, the carrying amount is $32,500.
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Deja
3 months ago
Right! The annual depreciation is $9,500.
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Glendora
3 months ago
I think we should start with the straight-line depreciation calculation.
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