[jeff]

Welcome to the Q4 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

[lampy44]

Becker: FAR 7 Pension

Anyone with past experience, how much pension stuff is generally on the exam? I am noticing its not as big a section. Any feedback greatly appreciated.

Disclaimer: I understand every exam is different. Just curious of everyone's experience.

Let's get it ninjas!!

[Lentilcounter]

@lampy44 I would just know all the basic pension formulas and how they work. It hard to say whether you will get a lot of it on your exam or a little bit because of I have experienced variations in my three attempts.

@Ana Thanks. I appreciate your help. Yes, I hope this is my last time although I haven't been able to break 70 yet like you.

I'm also trying to make sure I understand full goodwill (U.S. GAAP required) vs. partial goodwill (IFRS only allowed)

This is what I understand:

full goodwill under equity method = excess of the stock purchase price over the fair value of the net assets acquired

full goodwill under acquisition method = excess of entity's FV over the FV of the entity's net assets including identifiable intangible assets

partial goodwill = acquisition cost – fair value of the subsidiary's net assets acquired(use ownership %)

Do we not recognize goodwill under the cost/fair value method when the investment is below 20%?
Also, what ownership percentages can that partial goodwill formula be used for?

I got them out of Becker and I'm not sure if I missed those details. Thanks.

BEC = 72 (6/08/16)
FAR = ?
REG = ?
AUD = ?

[Lentilcounter]

@Meshach

It looks like an IFRS impairment question because they are talking about cash generating units?

CGU = $25M
A cash-generating unit comprises the following: $m
Building 20
Plant and equipment 10
Goodwill 5
Current assets 10
45
Following a downturn in the market, an impairment review has been undertaken and the recoverable amount of the cash-generating unit is estimated to be $25m. What is the carrying amount of the building after adjusting for the impairment loss?
A $10m B $11m C $12.5m D $20m

carrying value of CGU = $20M+$10M+$10M = $40M
impairment loss = $40M-$25M = $15M

$20M/$40M = 50% –> this is the percentage of the building that represented the carrying value of the CGU

$25M new CGU value x 50% = $12.5M carrying amount of the building

I'm not following how the answer is $10M? Is this a Becker question and if so, what section??

BEC = 72 (6/08/16)
FAR = ?
REG = ?
AUD = ?

[Ana]

@lampy44 know how to calculate overfunded and underfunded when it comes to pensions. In my three attempts I got easy questions on that topic.

[Ana]

!#$#@ just typed out an explanation for the goodwill method and when submitted it logged me out. damn it. from now on I'm going to copy my posts before submitting.

[Ana]

@lentil I don't think you calc goodwill under 20%, just for equity (20-50%) and acquisition.

re your comment: full goodwill under equity method = excess of the stock purchase price over the fair value of the net assets acquired
isn't it: purchase price – (FV of the net assets * % purchased)
for the equity method that's the only way to calc goodwill.

have you looked at the formulas in becker on full and partial goodwill F4-55? that helps me a lot. let me know if you need them shown here. this doesn't seem right: full goodwill under acquisition method = excess of entity's FV over the FV of the entity's net assets including identifiable intangible assets

[IwannabeaCPA2017]

Man, restudying for this section makes me feel so stupid! Another co-worker of mine failed this section and told me hes retaking it in 2 weeks and here I am retaking it in 2 months and have 1 section dropping and another section (REG) potentially dropping if I fail again from now until March. I honestly am praying every night and hope for a good testlet on this retake. I cant handle the fact that I may have to retake 3 sections during Busy season. Sorry I know I vent a lot on here but no one really understands in my social group aside from my co-workers but again I rarely speak about my progress cuz I feel embarrassed at work when most new starts are done and Ive been in the field for 1.5 years and still taking the exams.

[Ana]

@iwanna vent all you want, I'm here to listen and I feel your pain. you're not alone. I couldn't begin to tell you how much I've sacrificed for this test so far and I don't know when it will end. When I think about all the $$$ I've left on the table in my career to focus on the CPA…..

[IwannabeaCPA2017]

@Ana, Thanks. I would like to hear about your experience for FAR and BEC once those are over for you.. since I may need some insight lol. I appreciate how active u r on this forum and your willingness to help others! For your retake, are you redoing each chapter MCQ or you just doing comprehensive ones? Hopefully I can ask some questions by Mid October and start my review sooner..

[Lentilcounter]

@IwannabeaCP2017 and @ana

I feel your pain. I've been out of college for about 7 to 8 years now and all of my peers who have a business admin background + MBA are managers at their companies now. I think about all the time I've spent studying for this CPA and if I had put that time into my job, where would I be now?

But then, I think about the controllers and CFOs of larger companies and most of them are CPAs. CPAs run companies. MBAs manage people. I read this somewhere. Hope it is still true.

BEC = 72 (6/08/16)
FAR = ?
REG = ?
AUD = ?

[Wannafree]

@Discontinued operation question :Smith and co approved sale of business on 1st May 2016.I have no doubt that depreciation has to be stopped.My confusion is since when ? From 1st January or from 1st May ?
One more clarification : Income from discontinued operation will be for the whole year or from 1st May ?

[LCS]

@WannaFree I am pretty sure depreciation stops once management has decided to dispose the business, which is May 1, 2016. The loss on operation accounts for the entire year, not just from May 1st.

[Jim]

Hi everyone. Taking FAR 12/7 need to get this done before BEC expires in February

Aud- 79 Expired retaken November 19th (get score on Dec 8th)
BEC- 81 8/20/2014
REG- 79 7/13/2013
FAR- Jan 9th

[Wannafree]

Thanks LCS.

[jonm857]

Why do we remove an asset for an “improvement”? I understand why we remove the asset for a “replacement” because we are substituting an old asset for a new one. Not understanding this. See my reference below from Becker below:

Becker Ch. 3, Module 4, pg. F3-43

Improvements and Replacements

“If the carrying value of the old asset is known, remove it and recognize any gain or loss. Capitalize the cost of the improvement/replacement to the asset account.”

B - 81
A - 87
R - 73
F - July 5th

[Author]

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