CIMA CIMAPRA19-F03-1 Practice Exam

[Matthew Randell]

Information About CIMA CIMAPRA19-F03-1 Exam

Vender: CIMA
Exam Code: CIMAPRA19-F03-1
Exam Name: F3 Financial Strategy
Number Of Questions: 221
Certification Name: CIMA Professional Qualification
Exam Language: English
Questions Type: MCQs
Material Format: PDF & Web Practice Test Software

[Ethan Lewis]

Prepare CIMA CIMAPRA19-F03-1 Exam Questions

Question No 1:
On 31 October 20X3: • A company expected to agree a foreign currency transaction in January 20X4 for settlement on 31 March 20X4. • The company hedged the currency risk using a forward contract at nil cost for settlement on 31 March 20X4. • The transaction was correctly treated as a cash flow hedge in accordance with IAS 39 Financial Instruments: Recognition and Measurement. On 31 December 20X3, the financial year end, the fair value of the forward contract was $10,000 (asset). How should the increase in the fair value of the forward contract be treated within the financial statements for the year ended 31 December 20X3?

A. Not recognised in 20X3 as the forward contract is not settled until after the year end.
B. Not recognised in 20X3 as the gain will be offset by a loss on the hedged transaction.
C. A $10,000 profit will be recognised within the Income Statement.
D. A $10,000 profit will be recognised within other comprehensive income.

Answer: D

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