CIMAPRA19-F01-1 Exam - Topic 3 Question 12 Discussion

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

Question #: 12
Topic #: 3

An entity acquires 100% of the equity shares in another entity.

The consideration paid for the shares is less than the fair value of the net assets acquired.

Which of the following is the correct accounting treatment for the difference between the consideration paid and the fair value of the net assets acquired, in accordance with IFRS 3 Business Combinations?

ARecognise as a gain in the consolidated statement of profit or loss.

BRecognise as a deferred credit and release to consolidated profit or loss over its useful economic life.

CRecognise as a deduction from goodwill in the consolidated statement of financial position.

DRecognise as a gain in the statement of changes in equity.

Show Suggested Answer

Suggested Answer: A

by Hubert at May 08, 2022, 08:36 PM

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Elenora

4 months ago

Not sure about A, seems too straightforward.

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Carma

4 months ago

A makes the most sense, right?

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Katheryn

4 months ago

Wait, really? I thought it would be B!

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Luann

4 months ago

I think it's C, you deduct it from goodwill.

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Luis

5 months ago

It's definitely A, you recognize it as a gain!

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Darrin

5 months ago

Okay, I think I've got this. The key is to use the thief client in the specified folder to remotely connect to the server and check the file count. As long as I follow the instructions carefully, I should be able to handle this.

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Ronny

5 months ago

I think low-priority risks can be ignored, but we might need to keep an eye on them just in case.

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Percy

5 months ago

Okay, I've got this. The question is asking about the compliance status of the cloud customer, not the client. So options A and B can be eliminated since they mention the client. I'm leaning towards D as the best answer.

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Valda

5 months ago

Hmm, this seems like a tricky one. I'll need to think through the options carefully to make sure I understand the right approach.

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