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.

AThe subsidiary's cash inflows and outflows become part of the group after purchase

BCash acquired from the subsidiary upon purchase is represented as a cash inflow

CAdjustments need to be made to group working capital in light of the working capital acquired from the subsidiary

DNet cash paid to acquire a subsidiary is shown as a cash inflow within the cash flow from investing activities

EDisclosure notes are required to show cash and cash equivalents paid or received, but not details of goodwill, assets and liabilities acquired

FFurther adjustments are required to cash inflows and outflows after profit has been consolidated

Show Suggested Answer

Suggested Answer: A, B, C

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

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Lavelle

7 months ago

C seems right, adjustments for working capital are a must!

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Casie

7 months ago

B is correct, cash acquired counts as an inflow.

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Florinda

7 months ago

Wait, is it really true that E doesn't require details on goodwill?

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Alisha

7 months ago

I disagree with D, net cash paid is an outflow, not an inflow.

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Royal

8 months ago

A is definitely true! Subsidiary cash flows are included.

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Ashley

8 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

8 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

8 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

8 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

8 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

8 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

8 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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