[jeff]

NINJA Study Notes, Flashcards, and Audio: https://www.another71.com/products-page/

Wiley Software: https://www.another71.com/wiley-cpa-software/

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

[Anonymous]

@Revenue. I'm not sure I understand derivatives completely myself, but I can take a stab at explaining it and someone can correct me if I'm wrong. Fair value hedges and foreign currency hedges go to the income statement. The effective portion of a cash flow hedge goes to OCI initially, and the ineffective portion of a cash flow hedge goes to the income statement.

A fair value hedge is an instrument designated to protect the value of an investment you have. For example, I'm subject to the risk that my stock value will go down. I could buy a put option on my own stock so that if the value of my stock goes down, I can still sell at a higher price. Fair value hedge gains/losses go to the income statement regardless of if they are effective or ineffective.

A cash flow hedge is an instrument designated at hedging your risks due to variability of future cash flows. So, if I were a jewelry manufacturer and needed to buy gold in the future, I have a risk that the price will go up and I will pay more. To offset this risk, I could buy (take a long position) a forward contract on gold, so that if the price goes up, I will have a gain on the forward contract to offset the loss on the actual purchase of the gold. Conversely, if the price of gold goes down, I will have a loss on the forward contract, offset by the lower purchase price of gold.

My understanding is that if my actual net outflow of cash is within 1/5 of the desired outflow, then it is considered effective. So, if I want to purchase a quantity of gold in the future for $1,000, and my net cash outflow (after purchase of the gold and settlement of the cash flow hedge) is between $800 ($200/$1,000 = 1/5) and $1250 ($250/$1,250 = 1/5) then it is considered to be effective. Outside that range, it would be ineffective.

The ineffective portion of the cash flow hedge goes directly to the income statement as a gain/loss. The effective portion goes initially to Other Comprehensive Income. When the product you were hedging (gold in my example) is sold to customers, that gain or loss will be transferred from OCI to the income statement as a gain/loss.

[Anonymous]

Hi

So i am taking my FAR exam on July 3rd , if i do not pass this i will lose credit for BEC !!! i am still on F6 module from Becker( its ridiculous the amount of time i am taking per chapter !!! sigh ** )

Do you think it will be ok if i used only ninja notes for the govermental non for profit accounting part and cranked lots of MCQ's for these topics as opposed to going with Becker text for these portions , I want to finish one more round of revision of all the material before i take this exam on July 3rd … Any suggestions ?

[kambsa]

I am finding FAR very challenging. I am using Becker and on F2. It is also taking me a long time to get through the material with all the calcs and theory behind the calcs. I am supplementing with Wiley Test Bank too.

AUD - Passed 88
REG - Passed 87
BEC - Passed 78
FAR - Passed 75

[scott22xx]

@ canson16

I'm in the same boat as you. I'm just wrapping up F6 and I test on July 3. I am doing Becker's Fast Pass, but I was several chapters behind after the first week of FAR, so I just stopped going and decided to take it at my own pace. It is taking me a while to get through the material too. Probably because I am taking notes on the things that seem to trip me up in the MCQs.

My plan is to knock out one chapter per day and then begin to review. If I don't fell like I'm going to be prepared by next Tuesday (i.e. still not through all material), I'm going to push back the test a week and completely destroy my holiday.

I'm thinking, If you're not working F/T right now, it is doable. I recall from when I was studying for audit that once I began to review, everything started coming together and things started moving a lot faster.

MICHIGAN -- NTS 484

B: 7/29/12 - 81
A: 5/30/12 - 84
R: 8/29/12 - 77
F: 7/03/12 - 81

Becker Fast Pass & Self Study

[kjp226]

I'm currently in the process of studying for my first section of the CPA exam–FAR, which I will take on August 18. I'm currently on chapter 5 of Becker and already not feeling too confident about it. I'm averaging in the 60's for most of the questions at the end of the chapter, and don't seem to be retaining a lot of the information when I take the progress test. I'm sure it doesn't help that I'm working full time & working on my masters part time…but I'm having trouble sticking to the one chapter a week study regiment. I don't think I was as detailed as i needed to be on chapters 1-4, so for the rest of the chapters I'm going much more hardcore on the studying and will leave my review weeks before the exam to go back and fill in gaps where I was not so in depth.

I'm reaaaallllyyyy hoping not to have to take this exam more than once, but seeing some of the war stories on here has me thinking that may not be the case. I'm hoping start to retain more information as time goes on!

[jincredible]

Hi

Recent grad here taking FAR mid-July. I guess this is procrastination at work because I'm on a forum instead of studying. Cannot contribute much since this will be my first time taking any of the parts, but here is my take.

Full-time work does not start until Oct, I initially planned to crank out 3 parts before I started. After stumbling upon this forum, I became crazy motivated and had this idea of cramming all 4 parts before Oct. My tentative schedule at that time was:

FAR July 3

AUD Aug 1

BEC Aug 31

REG Oct 3

I sat on the idea for a while and I am glad I didn't go through with it. It became extremely daunting to study non-stop. I would wake up and study, head to the gym, came home and studied some more. It was okay for a week, but afterwards I would just be so mentally fatigued and would want to do anything else but study. There was no way I could've done this. Maybe someone with more willpower (or more coffee) could've stuck to this rigorous schedule, but I know that it was better to take my time.

To be clear, I do not condone going out, but I've given myself ample time for studying and reviewing that I can afford to. I study in the morning to afternoon and hang out at night. Hometown friends weekdays and perhaps head to the city on weekends. I am currently on F9 with the exam scheduled for July 12. If I feel that I am behind, I can always cram the final review, but cramming for months seems unrealistic.

I know that this does not apply to everyone, especially the full-timers, but any recent grads that are contemplating this move, proceed with caution. Be ambitious, but also be realistic.

Good luck and may the CPA exam be kind to us all.

FAR - 88
AUD - 98
REG - 87
BEC - 83

[Anonymous]

Boo! Took a month off since I passed BEC and REG and now need to start studying for FAR. Hopefully will start on Sunday or Monday. Its been nice. Now to get back to the structured routine of CPA study life….

Just a preliminary check-in 😉

[Anonymous]

So i chickened out – i was supposed to take FAR today and last night i felt sooo unprepared that i moved it to the 21st 🙁 i had gone over the Becker MCQ's once and read all chapters and made notes, but i still felt that i needed more time to know the material better,

[Sang]

@Lisa

I'm also from Alexandria VA preparing for FAR.. You can email me to parameswaran.sangeetha@gmail.com. I'm just started and on third chapter. Planning to hit the exam on october sometime.

[Anonymous]

Just finished my last exam in may … All four are down ( first sit )

Far 86

Aud 96

Reg 75

Bec 85

thank you becker … Was helpful

Currently preparing for CMA …

[hwtCPAexam]

@ jincredible

I'm in the same position as you. I graduated in May and started studying for FAR immediately. My original plan was to to take all four sections between July 1 and my Oct 3 start date. I realized after a couple of weeks that it would be unrealistic. There is just too much material to cover within that amount of time. I want to pass each of the sections in my first attempt. My plan right now is to have three sections finished before I start working full-time. I'm going to sit for the the exams in the following order:

FAR – July 11

REG – Aug 20

BEC – Oct 2

AUD – mid/late Nov

I've spent 200+ hours studying for FAR since May 20th. I've been in the final review stage and cramming for about the past week. Best of luck to you!

FAR 07/11/12 91
REG 08/20/12 89
BEC 10/01/12 84
AUD 01/08/13 88

[wwjkd]

Taking FAR on July 27. Finishing up Becker book and starting Wiley Test Bank MCQs like crazy for the next three weeks.

[Anonymous]

Can someone please explain the following question to me? It's a 2011 AICPA Released question.

In preparing Chase City's reconciliation of the statement of revenues, expenditures, and changes in fund balances to the government-wide statement of activities, which of the following items should be subtracted from changes in fund balances?

a. Capital assets purchases.

b. Payment of long-term debt principal.

c. Internal service fund increase in net assets.

d. Book value of capital assets sold during the year.

Solution:

Choice “d” is correct. The elimination of the book value of a previously acquired asset has no impact on fund financial statements but serves to reduce the changes in net assets of the government-wide financial statements as the asset is written off (net of proceeds and accumulated depreciation). The book value of capital assets is, therefore, essentially subtracted from change in fund balance to reconcile to the change in government-wide net assets. Actual reconciling items might focus more on the computation of a gain or loss and proceeds from the disposal rather than individual components such as the asset book value.

I kind of understand it. I understand that governmental funds don't hold fixed assets and the capital asset would have originally been booked as an expenditure. If that's the case, why would you subtract it again from the changes in fund balance? Doesn't it already show up there as an expenditure? Or are you subtracting the expenditure because it was sold? I think it's the wording of the question/answer that's confusing me. Thanks!

[shossain6]

Somebody correct me if I am wrong but I believe you subtract it since the asset was sold.

BEC - 75
AUD - 80
REG - 80
FAR - 67. 82 (Aug 2012)

[Anonymous]

I get that you subtract it but it was originally booked as an expenditure; not an asset, right? So if that's the case, you're actually subtracting the expenditure from the government-wide?

[Author]

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