[Operation_CPA]

For those studying or most importantly, re-studying FAR, I think this post could be of help to a lot of you. I was recently going through my Becker materials and when I clicked on the F3 section, a pop-up message appeared explaining that the F3 material had been updated for new FASB implementations. However, it did not specify exactly what had changed which I found a bit frustrating (especially because there are those that are re-taking the exam using the same notes, books, etc.)

Tonight while studying I found one of those differences. Previously, changes from the cost method to the equity method required retrospective adjustment. Now the new rule is as follows: When two or more purchases of stock cause ownership to go from less than 20% to more than 20%, the equity method should be used starting on the date significant influence is acquired and going forward. Retroactive adjustments of prior periods are not required.

Here is a link which provides more info:

https://www.journalofaccountancy.com/news/2016/mar/fasb-equity-method-of-accounting-201614065.html

If there are any other differences that have been implemented, please post here!

[jeff]

Long story short – when switching to Equity Method – apply it Prospectively … it's part of the Simplification Initiative – that's what I would know.

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

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