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CIMAPRA19-F01-1 Exam - Topic 5 Question 128 Discussion

OP holds an investment property purchased on 1 January 20X3 for $700,000 with a useful economic life of 25 years.At 31 December 20X5 the fair value of the investment property was $750,000 with a revised useful economic life of 25 years from that date.OP has been carrying the investment property using the cost model until 31 December 20X5.The directors wish to change their valuation method to fair value in accordance with IAS 40 Investment Property.Which of the following is the correct treatment of the revaluation gain and the value of the property in the statement of financial position at 31 December 20X5?
A) A gain of $134,000 taken to the statement of profit or loss and $750,000 shown on the statement of financial position.
B) A gain of $106,000 taken to the statement of profit or loss and $720,000 shown on the statement of financial position.
C) A gain of $134,000 taken to other comprehensive income and $750,000 is shown on the statement of financial position.
D) A gain of $106,000 taken to other comprehensive income and $720,000 is shown on the statement of financial position.

CIMAPRA19-F01-1 Exam - Topic 5 Question 128 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 128
Topic #: 5
[All CIMAPRA19-F01-1 Questions]

OP holds an investment property purchased on 1 January 20X3 for $700,000 with a useful economic life of 25 years.

At 31 December 20X5 the fair value of the investment property was $750,000 with a revised useful economic life of 25 years from that date.

OP has been carrying the investment property using the cost model until 31 December 20X5.

The directors wish to change their valuation method to fair value in accordance with IAS 40 Investment Property.

Which of the following is the correct treatment of the revaluation gain and the value of the property in the statement of financial position at 31 December 20X5?

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Suggested Answer: A

by Kaycee at Jun 18, 2026, 09:58 PM

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Erick
16 days ago
I’m confused about the calculations. Is it really $134,000 for A?
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Nohemi
21 days ago
I lean towards option C. Fair value gains should go to OCI.
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Louvenia
26 days ago
This question is tricky! I think option A makes sense.
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Micaela
1 month ago
Agree, option C makes the most sense here!
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Laurel
1 month ago
Wait, how can the gain be $134k? That doesn't add up!
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Susana
1 month ago
Definitely not option A, that gain calculation seems off.
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Annamaria
2 months ago
I think the gain should go to other comprehensive income.
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Viola
2 months ago
The property was bought for $700k and is now worth $750k.
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Nobuko
2 months ago
I believe the gain should be $134,000, but I can't recall if it goes to profit or other comprehensive income. I need to double-check that part.
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Tresa
2 months ago
I practiced a similar question where the gain was calculated differently. I feel like I might be mixing up the profit or loss treatment with other comprehensive income.
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Lizette
2 months ago
I think the fair value at 31 December 20X5 is $750,000, but I’m confused about how to calculate the gain correctly.
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Devon
2 months ago
I remember that under IAS 40, revaluation gains typically go to other comprehensive income, but I'm not sure about the exact amounts.
upvoted 0 times
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