CIMA Exam CIMAPRA19-F02-1 Topic 5 Question 110 Discussion

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

Question #: 110
Topic #: 5

RSis alisted entitythat has no subsidiaries although its Finance Director is also a director of TU, an unconnected entity.

It is preparing its financial statements to 30 September 20X6.

Which of the following substantial transactions must be disclosed in these financial statements in accordance withIAS 24 Related Party Disclosures?

APension payments made on behalf of the Managing Director of RS.

BPurchase ofproductionmaterials from TU at a discounted price to the current market value.

CSale of finished goods to TU at normal selling price.

DPerformance related bonuspayments made to the office staff for the year.

Show Suggested Answer

Suggested Answer: A

by Meaghan at Apr 09, 2025, 05:01 AM

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Tayna

3 months ago

Pension payments for the Managing Director? That's personal information, not a business transaction. I'm going with B as well.

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Ilona

2 months ago

I agree, pension payments for the Managing Director should not be disclosed as a substantial transaction.

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Candida

3 months ago

C) Sale of finished goods to TU at normal selling price.

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Madonna

3 months ago

B) Purchase of production materials from TU at a discounted price to the current market value.

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Malcolm

4 months ago

Ha! Performance-related bonuses to the office staff? That's hardly a related party transaction worth disclosing. I'd go with B.

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Josphine

3 months ago

Yeah, I also think the purchase of production materials from TU is the most significant transaction to disclose.

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Markus

3 months ago

I think the purchase of production materials from TU at a discounted price should be disclosed.

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Maddie

3 months ago

I agree, performance-related bonuses to office staff are not substantial enough to disclose.

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Kerry

4 months ago

I think C is the correct answer. The sale of finished goods to TU at normal selling price is still a related party transaction that should be disclosed.

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Eva

3 months ago

D) Performance related bonus payments made to the office staff for the year.

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Malika

3 months ago

C) Sale of finished goods to TU at normal selling price.

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Taryn

3 months ago

B) Purchase of production materials from TU at a discounted price to the current market value.

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Valda

3 months ago

A) Pension payments made on behalf of the Managing Director of RS.

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Rebeca

4 months ago

Definitely B. The purchase of materials from TU at a discounted price is a related party transaction that needs to be disclosed under IAS 24.

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Dick

4 months ago

I'm not sure about option A. Pension payments for the Managing Director may not be considered a related party transaction.

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Mel

4 months ago

I agree with Cherry. Option B seems like a related party transaction that should be disclosed.

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Cherry

4 months ago

I think option B should be disclosed because it involves a transaction with a related party.

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