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CIMA Financial Reporting F1 Question # 23 Topic 3 Discussion

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CIMA Financial Reporting F1 Question # 23 Topic 3 Discussion

F1 Exam Topic 3 Question 23 Discussion:
Question #: 23
Topic #: 3

On 1 January 20X6 PQR leases equipment for 3 years to use on a construction project. The total lease payments are $360,000 divided into 36 monthly instalments of $10,000 On 1 January 20X6 the present value of the lease payments is $270,000 and initial direct costs of $3,000 were incurred.

Which THREE of the following statements are true?
A.

Initial direct costs of $3,000 are expensed in the statement of profit or loss.

B.

The value of the lease liability on 1 January 20X6 is $270,000.

C.

The value of the right of use asset on 1 January 20X6 is $273,000.

D.

The right of use asset is depreciated over 3 years.

E.

The value of the lease liability on 1 January 20X6 is $273,000.

F.

Monthly payments of $10r0OO are expensed in the statement of profit or loss.

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Actual exam question for CIMA F1 exam by Onyx6345 at Aug 6, 2025, 7:12:23 AM

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