CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 74 Discussion

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

Question #: 74
Topic #: 1

AB acquired its one subsidiary, CD, on 1 January 20X1. At this date the fair value of CD's property, plant and equipment was found to be $40 million higher than its carrying value. The relevant items had a remaining estimated useful life of 10 years from the date of acquisition.

At 31 December 20X4 AB and CD presented property, plant and equipment of $100 million and $50 million respectively in their individual financial statements.

The value of property, plant and equipment presented in AB's consolidated statement of financial position at 31 December 20X4 is:

A$174 million

B$190 million

C$150 million

D$134 million

Show Suggested Answer

Suggested Answer: A, B, C, D

by Carma at Aug 31, 2023, 12:07 AM

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Roxanne

7 hours ago

The fair value adjustment of $40 million for CD's property, plant and equipment at the acquisition date is being amortized over 10 years, so the adjustment at the end of 20X4 would be $20 million. This means the consolidated value should be $150 million.

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