[jeff]

Welcome to the Q3 2017 CPA Exam Study Group for FAR. 🙂

Introduce yourselves and let your fellow NINJAs know when you plan to take your FAR exam.

The Five Steps (NINJA Framework): https://www.another71.com/pass-the-cpa-exam/

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

[Hiracpa]

Best of luck to everyone who just took the exam and who is about it. This is a beast.

@jwalk – Intercompany eliminations are the death of me. I just don't get the inventory / COGS eliminating JE's especially.

I need to vent / ask for advice. I have about a month left till the exam (August 28th), I've gone through the material once, includes just listening to the lectures, the skills practice and the MCQ's. Didn't do on the mcq's at all, would just be happy with above a 50%. Now I'm starting to review, reading the material, doing my own notes, and the flash cards. Starting F4 now. Im less than a month away now, but have had a few things come up this week. I'm not working, so i have the luxury of time. However, i'm getting more stressed about not putting in enough time bc of the few things that have come up. How many hours a day should i be spending on this? what is the average amount of hours, for the last few days i've only spend 2-3 hours a day. I'm getting stressed and freakin out. What did you guys do the last month to prepare? I've had passers say, they spend the last month day and night studying for this, and I'm just not doing it. Sigh.. am i doomed?

[DeterminedCPAer]

hey @falvio, can you provide any extra context? Are you talking about pension statements under PAPI funds for governmental accounting? like statement of net fiduciary changes and such?

[DeterminedCPAer]

hey @Hiracpa, i try to put in 3 hours monday through friday and 8 hours on weekends. usually take a day off because i get burned out. If you're off, while i dont think 8 hours a day may be necessary because you will get burned, i would still think you should be doing around 5 hours of studying a day. everyone is different though.

since you did everything once, i would say skim the chapters and continue on MCQs. Focus on why you didnt get a question right but rereading that part or chapter?

[falvio]

@DeterminedCPAer basically the financial statements for pension plans i.e statement of changes in accumulated plan benefits, statement of net assets available for benefits, etc.

[JMG]

I'm having a hard time with converting cash basis to accrual basis accounting, especially when the questions differ between starting with cash collections and starting with net income or expenses. Does anyone have a simplified, rule of thumb to go by?

[DeterminedCPAer]

@falvio

I didnt think they were actual statements. I created a mnemonic for myself to remember how to calculate ending PBO, SIPA AB. The AB is what you subtract. It's stupid but it helps me remember.

Beginning PBO
+ S – service cost (becker says it will be given)
+ I – interest cost (beginning PBO x discount rate)
+ P – prior service cost from current period plan amendment (this is what goes into OCI and you amortize)
+ A – actuarial loses

– A – acturial gains
– B – benefits paid
Ending PBO

For the FV of plan assets, use the BASE mnemonic

Beginning FV of plan assets
+ contributions and return on plan assets (actual or expected)
– benefits paid
Ending FV of plan assets

Note: If you use the expected return on plan assets, the difference between expected and actual returns must be amortized with the Gains and Losses (G in SIRAGE) using the Corridor Approach.

Corridor Approach:
Beginning unamortized gains/loses on change in actuarial assumptions + (positive/negative) change in return on plan assets
minus: greater of 10% of beginning PBO or beginning FV of plan assets
= excess
divide by: average remaining service life

[DeterminedCPAer]

Hey @jmg, i am in the same boat and just made myself memorize some techniques. i was actually doing this type of question off the 2017 AICPA FAR questions released and I got it wrong because I flipped prepaid and accrued liabilities up. the order matters.

+ ending
– beginning
– ending
+ beginning

The addition/subtraction is always plus, minus, minus, plus. And what you add/subtract is always the ending, beginning, ending, beginning.

The add/subtract the ending/beginning matters and what accounts are first and second.

Revenue – assets first
+ ending AR
– beginning AR
– ending unearned rev
+ beginning unearned rev

COGS – liabilities first
+ ending Accounts payable
– beginning accounts payable
– ending inventory
+ beginning inventory

Expenses – liabilities first
+ ending accrued liabilities
– beginning accrued liabilities
– ending prepaid expenses
+ beginning prepaid expenses

[abig]

@JMG

The key is to make sense of what the accounts mean. If accounts receivable increased 10k in the year and cash basis net income was 90k, that means under accrual basis net income would be 100k because in accrual basis you debit Accounts receivable and credit revenue.

Try to apply it to prepaid.

If beginning prepaid supplies was 5k and ending prepaid was 0k, and cash net income was 100k, accrual net income would be 95k because thats 5000 of supplies expense you include in the accrual income statement.

[abig]

The one thing that was confuse me with cash basis/accrual basis is outstanding checks and dates they were mailed.

I guess this may be bank recs, but nonetheless that confuses me

[DeterminedCPAer]

@abig I think outstanding checks will probably be a question if they ask about bank reconciliations. i dont think we'll have to worry about it as part of cash/accrual reconciliations.

[abig]

@determinedacper

Im thinking of MCQ where it has checks written on dec 28th and that are mailed on January 2nd.

How do we consider this for all possible types of questions

[DeterminedCPAer]

@abig

This confuses me too and i have gotten it wrong on a MCQ. However, after reading about it I think since the check hasn't been mailed out yet, it should be added back to cash on the books. Likewise, I think you would want to remove the decrease in AP or other payable account since the act of paying hasn't occurred (havent mailed the check).

Anyone want to chime in, am I thinking of this correctly or still confused?

[abig]

Sounds right, maybe similiar to outstanding checks.. we had back the cash balance ?

One of the many topics i need to review by sept 7.

August 17 I get audit, and a month later I get FAR back. Will be a big 2 months coming up.

[hmaevilla]

Took FAR today… did not finish. Simulations too long. Made good time through MCQs but the scrolling in the simulations slowed me down. Too much information. They need to shorten the simulations.

I was working through one when I ran out of time. I hope whatever I have filled correct in the one I was working on counts.

[abig]

@hmaevilla

What were the sims on?

[Author]

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