CIMAPRA19-F02-1 Exam - Topic 3 Question 112 Discussion

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

Question #: 112
Topic #: 3

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

by Krystal at Jun 13, 2025, 06:02 AM

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Remona

8 months ago

Totally agree, $190M makes sense!

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Dorothea

9 months ago

Wait, are we sure about that $40M? Seems high.

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Kati

9 months ago

So that's $190M total, right?

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Raul

9 months ago

Don't forget the $40M fair value adjustment!

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Pearlie

9 months ago

AB's PPE is $100M, CD's is $50M.

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Dalene

10 months ago

I feel like the fair value increase should be spread over the useful life, but I'm confused about how that affects the final total in the consolidated statement.

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Hermila

10 months ago

This question reminds me of a practice problem where we had to calculate the consolidated figures after a few years. I think we might need to deduct some depreciation from that fair value adjustment.

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Coletta

10 months ago

I think we need to add the fair value adjustment to AB's property, plant and equipment, but I can't recall the exact calculation method.

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Florinda

10 months ago

I remember we discussed how to adjust the fair value of assets during acquisitions, but I'm not sure how to apply it here.

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Blair

10 months ago

I feel confident I can solve this. The information provided gives me what I need to calculate the consolidated property, plant, and equipment value.

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Clay

11 months ago

Hmm, I'm a bit unsure about how to handle the individual financial statements versus the consolidated statement. I'll need to review that part carefully.

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Nan

11 months ago

I think I've got it. The key is remembering to amortize the fair value adjustment over the remaining useful life.

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Goldie

11 months ago

Okay, let's break this down step-by-step. We need to calculate the fair value adjustment and then figure out the consolidated value.

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Carole

11 months ago

This question seems straightforward, but I want to make sure I understand the details before answering.

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Jenelle

1 year ago

I'm not sure, but I think the answer might be B) $190 million, considering the fair value adjustment and the individual financial statements of AB and CD.

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Cassie

1 year ago

I agree with Lasandra, because the fair value adjustment of $40 million should be added to AB's property, plant and equipment.

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Lasandra

1 year ago

I think the answer is A) $174 million.

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Matthew

1 year ago

Let's see, AB's property, plant and equipment is $100 million, and CD's is $50 million. Then we have the $40 million fair value adjustment. Yep, gotta be B) $190 million. Easy peasy!

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Effie

1 year ago

Haha, I bet the person who wrote this question was trying to trick us. But I'm not falling for it! B) is the way to go.

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Marisha

1 year ago

Yeah, I think so too. It's always good to double check though.

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Shelia

1 year ago

I agree, B) $190 million seems like the correct answer.

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Hillary

1 year ago

The answer is clearly B) $190 million. The fair value of CD's property, plant and equipment was $40 million higher than its carrying value, and this difference should be amortized over the remaining 10-year useful life. Simple math, really.

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Domitila

1 year ago

So, the consolidated value would be $190 million.

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Deangelo

1 year ago

You're right, the fair value difference should be amortized over the remaining useful life.

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Willard

1 year ago

So, the total value of property, plant and equipment in AB's consolidated statement of financial position at 31 December 20X4 would be $190 million. Got it.

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Annabelle

1 year ago

Yes, that makes sense. The $40 million difference should be spread out over the 10 years, increasing the value of CD's property, plant and equipment in the consolidated statement.

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Ty

1 year ago

No, I believe it's B) $190 million.

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Julene

1 year ago

I think the answer is A) $174 million.

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Charlesetta

1 year ago

I think the answer is B) $190 million because the $40 million difference in fair value should be amortized over the remaining useful life of 10 years.

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