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CIMA F2 Exam Syllabus Topics:

SectionObjectives
Interpretation of Financial Statements- Performance evaluation
- Financial ratio analysis
Financial Statements- Preparation and presentation of financial statements
- Statement of cash flows
Financial Reporting Framework- Conceptual framework of financial reporting
- Regulatory environment and standards (IFRS overview)
Group Financial Statements- Business combinations
- Consolidated financial statements
- Associates and joint arrangements
Specialised Financial Reporting Topics- Events after reporting period
- Changes in accounting policies and estimates
- Financial instruments

CIMA Advanced Financial Reporting Sample Questions:

Question #1

ST acquired 75% of the 2 million $1 equity shares of CD on 1 January 20X3, when the retained earnings of CD were S3,550,000. CD has no other reserves.
ST paid $5,600,000 for the shares in CD and the non controlling interest was measured at its fair value of S1,400,000 at acquisition.
At 1 January 20X3, the fair value of CD's net assets were equal to their carrying amount, with the exception of a building. This building had a fair value of $1,000,000 in excess of its carrying amount and a remaining useful life of 25 years on 1 January 20X3.
At 31 December 20X5, the retained earnings of ST and CD were $8,500,000 and $5,250,000 respectively.
What is the value of retained earnings that will be presented in the consolidated statement of financial position of ST as at 31 December 20X5?

  • A. $10,080,000
  • B. $9,685,000
  • C. $9,775,000
  • D. $9,715,000
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

Question #2

Entity A entered into a 3 year operating lease on 1 April 20X3. The rentals are £5,000 a year payable in advance with an additional payment of $1,800 payable on 1 April 20X3.
The rental expense to be included in the statement of profit or loss for the year ended 31 December
20X3 will be:

  • A. $6,800
  • B. $5,600
  • C. $5,000
  • D. $4,200
Reveal Solution  Discussion  0

Correct Answer: D  🗳️

Question #3

Which THREE of the following would determine the functional currency of an overseas subsidiary in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates?

  • A. The currency which principally influences selling prices for goods and services.
  • B. The currency which principally influences the choice of functional currency of the parent.
  • C. The currency that mainly influences labour, material and other costs.
  • D. The currency in which all non-current assets are purchased and recognised.
  • E. The currency which the parent company uses to present its financial statements.
  • F. The currency in which operating receipts are retained.
Reveal Solution  Discussion  0

Correct Answer: A,C,F  🗳️

Question #4

A convertible bond with a nominal value of $100 can be redeemed at par in 5 years' time or be converted into 1 new equity share for every $5 of bond held.
The current equity share price is $3.50 and it is anticipated that this will grow at a rate of 7% per year.
What is the value of the conversion option of the bond in 5 years' time?
Give your answer to two decimal places.
$ ?

Reveal Solution  Discussion  0

Correct Answer:

98.18, 98.17, 98.179, 98.178

Question #5

A group presents its financial statements in A$.
The goodwill of its only foreign subsidiary was measured at B$100,000 at acquisition. There have been no impairments to this goodwill.
Exchange rates (where A$/B$ is the number of B$'s to each A$) are as follows:
The value of goodwill to be included in the group's statement of financial position in respect of its foreign subsidiary for the year ended 31 December 20X4 is:

  • A. A$132,000.
  • B. A$150,000.
  • C. A$75,758.
  • D. A$66,667.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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