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CIMAPRA19-F02-1 Exam - Topic 1 Question 55 Discussion

Which of the following statements are true regarding consolidated cash flows after the acquisition of a subsidiary?Select ALL that apply.
A) The subsidiary's cash inflows and outflows become part of the group after purchase and B) Cash acquired from the subsidiary upon purchase is represented as a cash inflow and C) Adjustments need to be made to group working capital in light of the working capital acquired from the subsidiary
D) Net cash paid to acquire a subsidiary is shown as a cash inflow within the cash flow from investing activities
E) Disclosure notes are required to show cash and cash equivalents paid or received, but not details of goodwill, assets and liabilities acquired
F) Further adjustments are required to cash inflows and outflows after profit has been consolidated

CIMAPRA19-F02-1 Exam - Topic 1 Question 55 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 55
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

Which of the following statements are true regarding consolidated cash flows after the acquisition of a subsidiary?

Select ALL that apply.

Show Suggested Answer Hide Answer
Suggested Answer: A, B, C

by Jacqueline at Jul 23, 2022, 09:13 PM

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Lavelle
8 months ago
C seems right, adjustments for working capital are a must!
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Casie
9 months ago
B is correct, cash acquired counts as an inflow.
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Florinda
9 months ago
Wait, is it really true that E doesn't require details on goodwill?
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Alisha
9 months ago
I disagree with D, net cash paid is an outflow, not an inflow.
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Royal
9 months ago
A is definitely true! Subsidiary cash flows are included.
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Ashley
9 months ago
I vaguely recall something about disclosure notes, but I'm not confident about E. Do we really not need to detail goodwill?
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Moon
9 months ago
I practiced a similar question where we discussed adjustments to working capital, so I feel like C might be correct too.
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Cathern
9 months ago
I'm not entirely sure about D; I thought cash paid for acquisition is usually shown as a cash outflow, not inflow.
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Lashawn
10 months ago
I remember that the subsidiary's cash flows do get included in the consolidated cash flows after acquisition, so I think A is true.
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Frederick
10 months ago
Hmm, I'm a bit confused by the different criteria listed in the options. I'll need to review the relevant section of the IT Act to make sure I understand the exemption rules properly.
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Tricia
10 months ago
I'm pretty confident that the right answer is that planning poker triggers a more detailed and task-oriented break-up of the story. That's the key benefit of this estimation technique.
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Brittney
10 months ago
Ah, this is a classic data privacy question. I've seen these before, so I'm feeling pretty confident I can figure this out.
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