[jeff]

FAR Resources:

Free FAR Notes & Audio – https://www.another71.com/cpa-exam-study-plan

FAR 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

FAR Score Release: https://www.another71.com/cpa-exam-scores-results-release

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

[big K]

Quick question…I am taking FAR next Thursday, the 29th, and today when i opened my Becker software it did a really long update. I am on the same computer I always use and all my scores have been synced. My concern is that the software questions were updated…and now what i need to know has changed. Anyone know a quick way I can check this?

[big K]

Quick question…I am taking FAR next Thursday, the 29th, and today when i opened my Becker software it did a really long update. I am on the same computer I always use and all my scores have been synced. My concern is that the software questions were updated…and now what i need to know has changed. Anyone know a quick way I can check this?

[Anonymous]

why don't they give you answers for the multiple choice questions in Becker final review materials? that is so dumb and annoying.

[NYCaccountant]

@ Utopia it depends on the vesting period. If I gave you stock options to purchase stock at $5, but the market price is $10, then I have given away some value for free, hence the expense for the Intrinsic value of $5 ($10-$5). Now that expense of $5 should be spread out over the vesting period. If an employee needs to work 2 years to earn the options, then the $5 expense will be spread out over those two periods. If the employee does not need to work any additional years, then the options are deemed earned, and the full expense is recognized in the current year.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Utopia]

Ｔｈａｎｋｓ－NYCaccountant　

Ｏｎｅ　ｍｏｒｅ　ｑｕｅｓｔｉｏｎ：　Ｗｈａｔｓ　ｔｈｅ　ｔａｘ　ｅｆｆｅｃｔ　ｏｆ　ｔｈａｔ？

[NYCaccountant]

@ Utopia. I'm of the opinion that deferred compensation plans create permanent differences. Compensation of gifted stock options are normally never tax deductible. I'm not a tax accountant, and thats the point I've successfully argued with my company's auditing firm. They let my opinion on it stand, so it I'm guessing I was correct. So you would add back compensation expense to net income, so that taxable income, and net income are exactly the same. Example:

Compensation Expense -10,000

Net Income – 100,000 (Includes Compensation Expense) Taxable income – 110,000 (Options expense not tax

deductible ever)

Tax Calc :

Taxable Income Per Financials – 110,000 Taxable Income Per Tax-110,000

Assume a 30 Percent tax rate :

Tax Per Financials – 33,000 Tax per tax return – 33,000

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Utopia]

Thanks NYCaccountant. In the Becker final review, they only took note said that deferred taxes- GAAP- expense now;Tax-deduction later when exercised ,without any further explanation.

One more question:

On July 1, year 7, Hilltop Company purchased as a long term investment Essex Company’s 10 year 9% bonds, with a face value of $100,000, for $95200. Interest is payable semiannually on Jan 1 and July 1. The bonds mature on July 1, year 11. Hilltop uses the straight line method of Amortization. What is the amount of interest income and amortization of bond discount that Hilltop should report in its income statements for the year ended December 31, year 7?

$4500 and $ 240

$4284 and $600

$4500 $ $600

$4284 and $240

The answer is C. I thought the revenue $4284. Any idea?

[Anonymous]

Can anyone confirm this? Or elaborate? Because it just doesn't make sense to me.

A change FROM equity method to cost or fair value method is accounted for prospectively.

This came up in one of my CPA excel lectures but otherwise I keep reading that a change to or from the equity method is retrospective for comparability purposes.

[so1913]

I'm having a serious “I just don't want to do this anymore” moment….FAR is getting the best of me.

AUD - 90 Pass
REG - 70,61,81 Pass DONE DONE DOOOOONNEEE!!!!!!!!
BEC - 79 - Pass
FAR - 70,82 - Pass

[NYCaccountant]

@ Utopia Na, interest income is actually $5,100. You have the face value of the bond * the interest rate ($100,000*9%)

that gets you to $9,000. You bought the bond in July, which means a half year of interest, so divide the 9,000 by 2 to get $4,500 interest revenue. Now you have to amortize that discount of $4,800 (100,000-95,200). Because you are using straight line, just divide the $4,800 by the 48 months left in the bonds life (Jul' 07-Jul'11), then multiple 100 * 6 for July-December of the current year. Leaves you with extra interest revenue of $600 for year 7.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

https://connect.mcgraw-hill.com/sites/0077328787/student_view0/ebook/chapter16/chbody1/permanent_differences.htm

I found this online. Says deferred compensation is a permanent difference. This goes with what I've been thinking, but sounds like Becker states that deferred comp is a temporary difference.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Anonymous]

No one knows anything about my question? 🙁

[NYCaccountant]

@ Dante I believe that it should be treated retrospectively for comparable purposes. It is a change from one accounting

principle to another. The only way I can see it being treated prospectively was if it involved estimates, which I can assume it def. does not.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Mike1987]

Becker does mention that the change from Cost to Equity is retrospective adjustment to beg retained earnings, but Equity to Cost is prospective. I am not sure why but it was in the Sims.

[solodolo]

Hey Everyone,

I'm taking FAR on 8/27. This will be my first exam since graduating in July. Been reviewing the lessons and doing as much as possible. 3 days left until the big day, including today. Feeling okay i guess. I wont really know until i get there.

Idk what to do anymore. Spending the last few days doing some MCQ's in sets of 30 and planning on reviewing all the lessons again from these Becker Final Review notes. I am using CPAExcel btw. Just using the notes to kinda sum up everything and go over them in a shorter amount of time.

Will let you know of my progess.

Interested in hearing what everyone else has to say and any advice + encouragement + criticism is welcome.

Thanks

FAR - 08/27/13 CPAExcel 90 + Becker Final Review Notes
AUD - 10/11/13 CPAExcel 82
BEC - 12/05/13 CPAExcel 80
REG - 08/04/14 CPAExcel 84 + Becker Final Review Notes

[Author]

Replies