CIMA Exam CIMAPRA19-F03-1 Topic 3 Question 61 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 61
Topic #: 3

An unlisted software development business is to be sold by its founders to a private equity house following the initial development of the software. The business has not yet made a profit but significant profits are expected for the next three years with only negligible profits thereafter. The business owns the freehold of the property from which it operates. However, it is the industry norm to lease property.

Which THREE of the following are limitations to the validity of using the Calculated Intangible Value (CIV) method for this business?

AThe business owns the freehold property from which it operates.

BSignificant profits are forecast for the next three years with only negligible profits thereafter.

CThe business has not yet made a profit.

DThe CIV method cannot be applied to an unlisted company.

EThe intellectual property representing the software development has not been included in the accounts.

Show Suggested Answer

Suggested Answer: A, C, E

by Tyra at Dec 11, 2022, 03:53 AM

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