CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 52 Discussion

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

Question #: 52
Topic #: 1

A local council is one year into a two year project to renovate local parks. The project is on track to be completed within the set time-scale, however it has proved more costly than initially expected.

The project is on track to be completed within its two year period. Contracts for the labour and materials needed to renovate the parks were agreed at the start of the project and no changes have arisen. Despite the fact that the council has yet to fully settle these contracts, costs are set to be as budgeted.

Why would this example not be recognised as a provision?

ANeither the timing nor the amount of the provision is uncertain.

BThe settlement of the contract is unlikely to result in an outflow from the council.

CThe council doesn't have a present obligation from the project.

DThe council has no potential future obligations arising from the project.

Show Suggested Answer

Suggested Answer: A

by Diane at May 29, 2022, 06:04 AM

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