CIMA Exam CIMAPRA19-F02-1 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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Jenelle

1 months 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 months 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 months ago

I think the answer is A) $174 million.

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Matthew

2 months 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

2 months 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 months ago

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

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Shelia

1 months ago

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

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Hillary

2 months 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 months ago

So, the consolidated value would be $190 million.

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Deangelo

1 months ago

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

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Willard

1 months 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 months 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

2 months ago

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

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Julene

2 months ago

I think the answer is A) $174 million.

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Charlesetta

2 months 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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