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CIMAPRA19-F02-1 Exam - Topic 1 Question 70 Discussion

ST acquired 75% of the 2 million $1 equity shares of CD on 1 January 20X3, when the retained earnings of CD were S3,550,000. CD has no other reserves.ST paid $5,600,000 for the shares in CD and the non controlling interest was measured at its fair value of S1,400,000 at acquisition.At 1 January 20X3, the fair value of CD's net assets were equal to their carrying amount, with the exception of a building. This building had a fair value of $1,000,000 in excess of its carrying amount and a remaining useful life of 25 years on 1 January 20X3.At 31 December 20X5, the retained earnings of ST and CD were $8,500,000 and $5,250,000 respectively.What is thefigure fornon-controlling interestto be shown in the consolidated statement of financial position of STas at 31 December 20X5?
A) $1,795,000 and B) $1,607,500
C) $1,825,000
D) $1,805,000

CIMAPRA19-F02-1 Exam - Topic 1 Question 70 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 70
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

ST acquired 75% of the 2 million $1 equity shares of CD on 1 January 20X3, when the retained earnings of CD were S3,550,000. CD has no other reserves.

ST paid $5,600,000 for the shares in CD and the non controlling interest was measured at its fair value of S1,400,000 at acquisition.

At 1 January 20X3, the fair value of CD's net assets were equal to their carrying amount, with the exception of a building. This building had a fair value of $1,000,000 in excess of its carrying amount and a remaining useful life of 25 years on 1 January 20X3.

At 31 December 20X5, the retained earnings of ST and CD were $8,500,000 and $5,250,000 respectively.

What is thefigure fornon-controlling interestto be shown in the consolidated statement of financial position of STas at 31 December 20X5?

Show Suggested Answer Hide Answer
Suggested Answer: A, B

by Staci at May 31, 2023, 04:00 AM

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Lynelle
10 months ago
Totally agree, the building's value is key here!
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Elina
10 months ago
Wait, how does that building add up over time?
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Brittani
10 months ago
I think the building's fair value adjustment affects this.
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Sherron
11 months ago
Non-controlling interest is $1.4M at acquisition.
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Gail
11 months ago
ST paid $5.6M for 75% of CD.
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Lashawnda
11 months ago
I feel like I might have mixed up the calculations for the non-controlling interest. I remember we had a similar question, but I can't recall the exact steps we took.
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Joanne
11 months ago
I think the non-controlling interest is based on the fair value at acquisition, but I’m a bit confused about how the retained earnings of CD affect it.
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Mabel
11 months ago
This question seems similar to one we practiced where we had to adjust for fair value differences. I think the excess fair value needs to be amortized over the building's life.
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Aretha
11 months ago
I remember we discussed how to calculate non-controlling interest, but I'm not sure about the adjustments for the building's fair value.
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Blossom
11 months ago
I've got this one! The most important issue is the misapplication of the SPC results and the risk of making incorrect conclusions. That's the biggest concern with using pre-built software for this kind of analysis.
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Dorthy
11 months ago
I vaguely recall something about dynamic firewall importing, but I can't quite remember if it's supported in this context.
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Raina
11 months ago
This is a good test of our understanding of relational database design. I think the key is to recognize that we need a table structure to store the volunteer data, not a view. Option A looks like the way to go.
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Alana
11 months ago
This is similar to a practice question we had on Optimal Gateway routing, and I think the answer is related to how the sites communicate with each other.
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Nadine
11 months ago
I think the answer is A, White Box, but I'm not 100% confident. I'll double-check the definitions just to be sure before submitting my answer.
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Edison
1 year ago
Haha, this question is like a game of Sudoku. Gotta love these types of tricky accounting problems!
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Dannie
1 year ago
This question is like a puzzle! I'm going to carefully work through the numbers step-by-step to make sure I don't miss anything.
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Jacki
1 year ago
After going through the numbers, I believe the correct figure for non-controlling interest is $1,795,000.
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Beckie
1 year ago
I think we need to consider the fair value of the building in our calculations.
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Lindsay
1 year ago
Let's start by calculating the non-controlling interest based on the information given.
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Laura
1 year ago
Why do you think it's C)?
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Alisha
1 year ago
I disagree, I believe the correct answer is C) $1,825,000.
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Laura
1 year ago
I think the answer is A) $1,795,000.
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Dorathy
1 year ago
Why do you think it's C)?
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Paris
1 year ago
Hmm, I think I need to double-check the calculations on this one. The information provided seems a bit tricky, but I'm leaning towards D as the correct answer.
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Miesha
1 year ago
I'm not entirely sure, but I think D is the most likely answer based on the information given.
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Berry
1 year ago
I agree, the information is a bit tricky. But I also think the correct answer is D.
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Roy
1 year ago
I'm pretty sure the answer is C. The non-controlling interest seems to be calculated based on the fair value at acquisition, and the increase in retained earnings of CD over the years.
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Rickie
1 year ago
I disagree, I believe the correct answer is C) $1,825,000.
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Dorathy
1 year ago
I think the answer is A) $1,795,000.
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