[tmturner74]

Is it ok to start a FAR Study Group? I retook Audit yesterday and although I don’t have a gut feeling either way if I passed or not, I am going to start on FAR. I am using Becker self-study and purchased the Ninja Notes for FAR.

I am looking forward to reading a/b everyone’s progression. Good Luck!

 

Aud- 11/28/12 (72), 02/27/13 (72), 04/06/2013 77!!
FAR-tbd
BEC-tbd
REG-tbd

[Theo]

**double post

AUD 01/17/2013 (92)
REG 02/28/2013 (85)
FAR 04/26/2013 (85)
BEC 05/30/2013 (88)

[Theo]

**double post

AUD 01/17/2013 (92)
REG 02/28/2013 (85)
FAR 04/26/2013 (85)
BEC 05/30/2013 (88)

[Theo]

From the FASB codification:

“845-10-25-6 An exchange of nonmonetary assets that would otherwise be based on recorded amounts but that also involves monetary consideration (boot) shall be considered monetary (rather than nonmonetary) if the boot is significant. Significant shall be defined as at least 25 percent of the fair value of the exchange. If the boot in a transaction is less than 25 percent, the pro rata gain recognition guidance in paragraph 845-10-30-6 shall be applied by the receiver of boot, and the payer of boot would not recognize a gain.”

I don't know about you guys, but to me this is alot simpler than Becker's explanation.

BTW @bcjasper09 I am guessing that the exchange lack commercial substance because cash flows did not change significantly. Given up (NBV $3,000 + Cash $21,500) $24,500 and Received $25,000.

Per Becker, if an exchange lacks commercial substance and boot is paid, no gain is recognized.

AUD 01/17/2013 (92)
REG 02/28/2013 (85)
FAR 04/26/2013 (85)
BEC 05/30/2013 (88)

[Anonymous]

NYC Girl- Just give it time. Most of that material is covered in later lectures. I had the same trouble and got a little discouraged. Once you go through all the lectures and come back you will understand it much better.

Thoe- You have me concerned about that topic! I might have to read the codification (yikes.. I never thought I would be saying that) and see if I can figure it out. Becker definitely doesn't have anything on it because I've been through the MCQ twice now and haven't seen anything that I recall.

[Anonymous]

NYC Girl- Just give it time. Most of that material is covered in later lectures. I had the same trouble and got a little discouraged. Once you go through all the lectures and come back you will understand it much better.

Thoe- You have me concerned about that topic! I might have to read the codification (yikes.. I never thought I would be saying that) and see if I can figure it out. Becker definitely doesn't have anything on it because I've been through the MCQ twice now and haven't seen anything that I recall.

[Anonymous]

*Double Post

Theo- As I was reading through the explanation in Becker on transfer and servicing.. It states that it addresses it further in F5. I was redoing the homework for bonds and long term liabilities and I remember a question regarding this topic. It was the last question and it said something about giving your assets to a trustee and the trust would pay the obligations of the bonds and your future liability would be remote. The question asks what you would recognize for a gain. In the explanation it says something about the two ways a debtor is relieved from liability: paying the creditor and being judicially released. This doesn't sound like transfer and servicing but its the closest thing I've seen.

[Anonymous]

*Double Post

Theo- As I was reading through the explanation in Becker on transfer and servicing.. It states that it addresses it further in F5. I was redoing the homework for bonds and long term liabilities and I remember a question regarding this topic. It was the last question and it said something about giving your assets to a trustee and the trust would pay the obligations of the bonds and your future liability would be remote. The question asks what you would recognize for a gain. In the explanation it says something about the two ways a debtor is relieved from liability: paying the creditor and being judicially released. This doesn't sound like transfer and servicing but its the closest thing I've seen.

[Theo]

I did have one additional question on servicing financial assets before I was through with the Wiley MCQ's on monetary assets & liabilities. I too am very concerned. Here is a link to a PwC publication on the subject. I plan on browsing through it if I can find some extra time.

https://www.pwc.com/us/en/cfodirect/assets/pdf/accounting-guides/pwc_transfer_2012_boomarked-05.pdf.

Based on what I've read so far, I don't see anything in F5 that relates to the transfer or servicing of financial assets/liabilities.

AUD 01/17/2013 (92)
REG 02/28/2013 (85)
FAR 04/26/2013 (85)
BEC 05/30/2013 (88)

[Theo]

I did have one additional question on servicing financial assets before I was through with the Wiley MCQ's on monetary assets & liabilities. I too am very concerned. Here is a link to a PwC publication on the subject. I plan on browsing through it if I can find some extra time.

https://www.pwc.com/us/en/cfodirect/assets/pdf/accounting-guides/pwc_transfer_2012_boomarked-05.pdf.

Based on what I've read so far, I don't see anything in F5 that relates to the transfer or servicing of financial assets/liabilities.

AUD 01/17/2013 (92)
REG 02/28/2013 (85)
FAR 04/26/2013 (85)
BEC 05/30/2013 (88)

[Anonymous]

thank you @bcjasper, will keep that in mind while working on this chapter 🙂

[Anonymous]

thank you @bcjasper, will keep that in mind while working on this chapter 🙂

[Anonymous]

Alright. I read the site I posed about the transferring and service of these said financial assets. In a nutshell, that question I referenced is related to this. Essentially its just like pledging or receiving of receivables except it deals with more complex financial instruments such as derivatives. You account for it like most other transfers as a true sale if it meets three conditions and they are recognized at Fair Value. In the event that you don't transfer all of the assets, you would allocate your NBV to the relative FV of those given up. You than amortize the liability over the life of the income received (if any). The debtor will only be released from liability by: Payment, or by release either judicially or by the creditor. Essentially to meet the test you have to give the assets up, retain no interest in them, and not have the obligations discharged in any sort of way. They have to be “removed” from your control. I think with those simple basics you should be able to understand any question you might see. For reference to this I went to this site: https://www.fasb.org/summary/stsum140.shtml

Its much shorter than the 360+ pages from the PwC publication.

[Anonymous]

Alright. I read the site I posed about the transferring and service of these said financial assets. In a nutshell, that question I referenced is related to this. Essentially its just like pledging or receiving of receivables except it deals with more complex financial instruments such as derivatives. You account for it like most other transfers as a true sale if it meets three conditions and they are recognized at Fair Value. In the event that you don't transfer all of the assets, you would allocate your NBV to the relative FV of those given up. You than amortize the liability over the life of the income received (if any). The debtor will only be released from liability by: Payment, or by release either judicially or by the creditor. Essentially to meet the test you have to give the assets up, retain no interest in them, and not have the obligations discharged in any sort of way. They have to be “removed” from your control. I think with those simple basics you should be able to understand any question you might see. For reference to this I went to this site: https://www.fasb.org/summary/stsum140.shtml

Its much shorter than the 360+ pages from the PwC publication.

[Qlad]

I am so tired of studying today…just needed some inspiration…found these words by Lincoln, hope these will encourage someone else too..

“If I have to cut a tree in 8 hours, I would spend 7 hours to sharpen my axe”

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

I am so tired of studying today…just needed some inspiration…found these words by Lincoln, hope these will encourage someone else too..

“If I have to cut a tree in 8 hours, I would spend 7 hours to sharpen my axe”

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Author]

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