[jeff]

I’ve had a few requests for April/May Study Groups…March will be here before you know it.

In order to take an early April exam, you should begin studying…now. 🙂

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

[stoleway]

$1030,000?

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[lexus423]

Cook Company had the following investment portfolio of stocks that were purchased during year 2.

Stock Classification Cost Fair Value 12-31-Y2

Company R Available-for-sale $30,000 $32,000

Company S Trading $42,000 $46,000

Company T Available-for-sale $15,000 $18,000

Cook elects to use the fair value option for reporting the investment in Company R. Which of the following statements is true?

A-Cook will report an unrealized gain on securities for $6,000 on the year 2 income statement.

B-Cook may not elect the fair value method for the investment in Company R unless it also uses the fair value method for investments in Companies S and T.

C-Cook will report an unrealized gain in other comprehensive income for $5,000 in year 2.

D-Cook will report an unrealized gain on securities for $9,000 on the year 2 income statement.

Answer is A. Can someone explain this?

FAR- 2014
AUD- 2014
REG- 2014
BEC- 2014

[reenz]

Lexus 423, i think the answer should be C for the information given.

[jrosen92770]

Since the FV option was elected both the gains for trading and AFS are included in earnings. See below:

FAS159

STANDARDS OF FINANCIAL ACCOUNTING AND REPORTING

The Fair Value Option

3. This Statement permits all entities to choose, at specified election dates, to measure

eligible items at fair value (the “fair value option”). A business entity shall report

unrealized gains and losses on items for which the fair value option has been elected

in earnings (or another performance indicator if the business entity does not report

1earnings) at each subsequent reporting date. Upfront costs and fees related to items for

which the fair value option is elected shall be recognized in earnings as incurred and

not deferred.

BEC - 5/26/2013 75
REG - 8/31/2013 82
AUD - 11/24/2013 74, 2/9/2014 92
FAR - 5/25/2014 85

NY CPA

[jrosen92770]

Some more info…..

29. If an entity elects the fair value option for a held-to-maturity or available-for-sale

security in conjunction with the adoption of this Statement, that security shall be

reported as a trading security under Statement 115, but the accounting for a transfer to

the trading category under paragraph 15(b) of Statement 115 does not apply. Electing

the fair value option for an existing held-to-maturity security will not call into question

the intent of an entity to hold other debt securities to maturity in the future.

BEC - 5/26/2013 75
REG - 8/31/2013 82
AUD - 11/24/2013 74, 2/9/2014 92
FAR - 5/25/2014 85

NY CPA

[jrosen92770]

According to the Becker glossary:

Under the FV option, unrealized gains and losses are reported in earnings. The FV option is irrevocable and is applied to individual financial instruments.

BEC - 5/26/2013 75
REG - 8/31/2013 82
AUD - 11/24/2013 74, 2/9/2014 92
FAR - 5/25/2014 85

NY CPA

[NJPRU]

JRO – so the unrealized gains would then therefore be applicable to earnings and OCI for trading and available for sale respectfully when they are valued under the cost method – which is what probably trips people up.

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[jrosen92770]

Yeah, it is an exception discussed in chapter 10 of Becker.

BEC - 5/26/2013 75
REG - 8/31/2013 82
AUD - 11/24/2013 74, 2/9/2014 92
FAR - 5/25/2014 85

NY CPA

[NJPRU]

Thanks for the touch point! 🙂

I shall begin my endeavor into the world of pensions tonight! uyyyyeeeee

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[jrosen92770]

Have fun….I am reviewing.

BEC - 5/26/2013 75
REG - 8/31/2013 82
AUD - 11/24/2013 74, 2/9/2014 92
FAR - 5/25/2014 85

NY CPA

[Anonymous]

Hey guys! Just popping in to say hi. Worked late, scarfed down a sandwich for dinner and I'm planning on going through my notes and the Becker Outline Notes tonight. Happy studies!

[jrosen92770]

Starting Lease, Liabilities, and Bonds.

BEC - 5/26/2013 75
REG - 8/31/2013 82
AUD - 11/24/2013 74, 2/9/2014 92
FAR - 5/25/2014 85

NY CPA

[jrosen92770]

Then I am 1/2 way done with my first pass.

BEC - 5/26/2013 75
REG - 8/31/2013 82
AUD - 11/24/2013 74, 2/9/2014 92
FAR - 5/25/2014 85

NY CPA

[SpartanCPA]

As the exam date is getting closer for each of us, how is everyone feeling?

I have F8-10 MCQs to re-do over again. Hoping to get all of it done by the end of this weekend.

AUD - 01/18/14 - 81
BEC - 05/29/14 - 85
FAR - 07/18/14 - 81
REG - 11/18/14 - 80

Becker CPA Review
NINJA Audio
Michigan State University

[NJPRU]

My exam is in 2 months and I feel like a 93408239458 ton boulder has fallen on my brain with this pension stuff. :-O

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[Author]

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