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

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?
A) Pension payments made on behalf of the Managing Director of RS.
B) Purchase ofproductionmaterials from TU at a discounted price to the current market value.
C) Sale of finished goods to TU at normal selling price.
D) Performance related bonuspayments made to the office staff for the year.

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

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 110
Topic #: 5
[All CIMAPRA19-F02-1 Questions]

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?

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Suggested Answer: A

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

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Benton
8 months ago
I'm surprised that transactions with an unconnected entity are still relevant here.
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Jerry
9 months ago
I think the purchase from TU should be disclosed too, right?
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Kimbery
9 months ago
A pension payment for the MD definitely needs disclosure.
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Royce
9 months ago
Wait, why would selling at normal price to TU matter?
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Hyun
9 months ago
Totally agree, the bonus payments should be disclosed as well!
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Allene
10 months ago
I don’t think the performance bonuses are related party transactions since they’re for office staff, but I could be wrong.
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Simona
10 months ago
I practiced a similar question where we had to identify transactions with directors. I feel like the sale of goods to TU might not need disclosure since it’s at normal price.
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Adelaide
10 months ago
I think the purchase from TU is definitely a related party transaction since the Finance Director is involved, but I’m unsure about the discount aspect.
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Dan
10 months ago
I remember discussing related party transactions in class, but I'm not sure if pension payments count as substantial.
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Janella
10 months ago
I feel confident I can solve this, I just need to apply my knowledge of related party disclosures systematically.
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Dana
11 months ago
The wording of the options is tricky, I'll need to read them closely to determine which one matches the requirements of IAS 24.
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Sanjuana
11 months ago
Okay, I think I've got this. The key is to identify any transactions between RS and the unconnected entity TU since they share a director.
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Layla
11 months ago
Hmm, I'm a bit unsure about the specifics of IAS 24 and what needs to be disclosed. I'll have to review that standard carefully.
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Susana
11 months ago
This question seems straightforward, I just need to focus on the key details about related party transactions.
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Tayna
1 year 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
1 year ago
I agree, pension payments for the Managing Director should not be disclosed as a substantial transaction.
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Candida
1 year ago
C) Sale of finished goods to TU at normal selling price.
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Madonna
1 year ago
B) Purchase of production materials from TU at a discounted price to the current market value.
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Malcolm
1 year 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
1 year ago
Yeah, I also think the purchase of production materials from TU is the most significant transaction to disclose.
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Markus
1 year ago
I think the purchase of production materials from TU at a discounted price should be disclosed.
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Maddie
1 year ago
I agree, performance-related bonuses to office staff are not substantial enough to disclose.
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Kerry
1 year 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
1 year ago
D) Performance related bonus payments made to the office staff for the year.
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Malika
1 year ago
C) Sale of finished goods to TU at normal selling price.
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Taryn
1 year ago
B) Purchase of production materials from TU at a discounted price to the current market value.
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Valda
1 year ago
A) Pension payments made on behalf of the Managing Director of RS.
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Rebeca
1 year 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
1 year 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
1 year ago
I agree with Cherry. Option B seems like a related party transaction that should be disclosed.
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Cherry
1 year ago
I think option B should be disclosed because it involves a transaction with a related party.
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