CIMAPRA19-F02-1 Exam - Topic 1 Question 24 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 24
Topic #: 1

GH acquired3,000,000 of the 12,000,000 equity shares of JK. All shares carried equal voting rights and no other single shareholder of JK held more than 10% of the equity shares. GH has the power to participate in the financial and operating policy decisions but not control them.

Based on the information provided above, how would GH's investment in JK be accounted for in its consolidated financial statements?

AAssociate

BJoint venture

CJoint arrangement

DFinancial asset

Show Suggested Answer

Suggested Answer: A

by Helaine at May 07, 2022, 03:20 PM

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Blair

4 months ago

I thought it could be a Financial Asset, but I see the Associate point.

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Bo

4 months ago

Definitely an Associate, given the voting rights and share distribution.

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Marti

4 months ago

Wait, are we sure it’s not a Joint Venture? Seems like a gray area.

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Terrilyn

4 months ago

Totally agree, they have significant influence but not control.

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Chaya

5 months ago

GH's investment would be accounted for as an Associate.

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Stefania

5 months ago

This is a good question to test our understanding of GL account types and how they relate to the transaction details. I'll need to carefully consider the options and make sure I understand the relationship between the main/subtransactions and the GL accounts.

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Brent

5 months ago

I'm not sure I fully understand the purpose of the MimicExplainer. Does it just mimic the original model, or does it actually provide the feature importance calculations? I'll need to do some more research on that.

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Domitila

5 months ago

Always go for the most comprehensive approach. I think option A with written guidelines plus coding instructions gives physicians a clear, reference-able resource they can review anytime.

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Golda

5 months ago

These medical organizational structure questions always trip me up. I'll eliminate options that seem too similar and compare the subtle differences carefully.

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