CIMA Exam CIMAPRA19-F02-1 Topic 4 Question 107 Discussion

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

Question #: 107
Topic #: 4

Which of the following statements are INCORRECT with regards to impairment of financial instruments; Select ALL that apply.

AHeld to maturity instruments and available for sale assets are both measured at amortised cost and are therefore impacted by impairment.

BIf a loss is suspected following an impairment review, a financial asset is written down to its fair value.

CIf a contract relating to a financial instrument is breached then this might be an indication of impairment.

DIn the result of an impairment loss, the carrying amount of the asset is directly reduced, or reduced through an allowance account.

EThe impairment loss on held to maturity instruments is the difference between the assets carrying amount and the present value of its future cashflows.

Show Suggested Answer

Suggested Answer: A, B

by Latricia at Feb 09, 2025, 10:54 AM

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Paulina

12 days ago

A and E are correct. If a financial instrument is held to maturity, it should be measured at amortized cost and impacted by impairment. The impairment loss is the difference between the carrying amount and the present value of future cash flows.

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Rikki

4 days ago

B) If a loss is suspected following an impairment review, a financial asset is written down to its fair value.

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Marguerita

12 days ago

I disagree with you, Penney. Statement A is actually correct because both held to maturity instruments and available for sale assets are measured at amortised cost.

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Penney

17 days ago

I think statement A is incorrect because held to maturity instruments are not impacted by impairment.

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