[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

[Sturg]

I can't recommend enough Brainscape for flashcards. I sometimes cut and paste really tough theory MC questions into flashcards to drive home the concepts and literally read them whenever I have a spare second during the day. I can try and share them with anyone interested..?

Was hoping someone could explain why this is the correct deferred revenues answer.. I am awful at Govt accounting and it felt like I got a ton of questions on it the last time I took FAR so I'm trying to study a ton of Govt and IFRS material…

Question:
The following information is relevant to one of the City of Mullins' General Fund's derived tax revenues:
Fiscal year-end June 30
Beginning receivables $450,000
Beginning deferred revenues 100,000
Beginning allowance for doubtful accounts 50,000
Receipts 1,250,000
Ending receivables 600,000
Receivables collected 6/30 – 8/30 125,000
Ending allowance for doubtful accounts 60,000
The City of Mullins considers derived tax receivables collected within 60 days after the close of the fiscal year to be “available.” Furthermore, the City wrote off $30,000 of receivables as uncollectible during the year.

What would be the amount of deferred revenues reported at the fund level for year-end?

Answer:
At the fund level, derived tax revenues are reported using the modified accrual method. Using modified accrual, that portion of the ending receivable which is measurable but not available, or accounted for as an allowance, is accounted for as deferred revenue.

Ending receivable $600,000
Less collections June 30 through August 30 (125,000)
Less ending allowance for doubtful accounts (60,000)
———
$415,000

I just don't understand the theory behind the getting to the answer. So frustrating, test in 12 days starting to feel the pressure.

Thanks all.

[Wannafree]

@Ana , I told you so no big car would be waiting for u😁😁

[Ana]

One more tip using the AL, try to narrow down the topic, section, sub section, as much as you can but then use a keyword search using the ‘search within' button. Don't use ‘search' unless you're absolutely desperate because that will show you the keyword in the whole code. For example, you're looking for “historical cost of pp&e”. So you go to ‘Assets', then tab ‘PP&E', then you're not sure so use keywords “historical cost” and ‘search within' the tab of PP&E. Hopefully you'll get to 360-10-30-1 and that can help you calc historical cost on a sim. BUT if you use ‘search' instead of ‘search within' you'll end up in ‘Broad Transactions' or who knows where else. Is this making sense to you guys?

[Ana]

@wanna here it goes…YOU WERE RIGHT. relish it 🙂 not too often a woman will say that lol

[Victor]

Hello Everyone,

I'm Victor just joined, taking FAR on 11-11. Though I'm not so confident that I'm going to pass, which sucks as I already failed BEC.

Anyway good look to everyone else!!

[Ana]

HI Victor, how long have you been studying FAR for?

[Victor]

Hello Ana

Pleasure to meet you.

I've been working on it since August.

Its just so much material to remember. It doesn't help that I have horrible study habits.

Congrats on your progress though, you're almost at the finish line!!

[Wannafree]

@Ana , the reason I was so sure , last 3 attempts I was fully ready for CAR , Govt recon , pension, it didn’t appear.LOL
Thanks for Al tips and confirmation that it can be used with in time constraints in FAR .

[Ana]

@victor thanks but you never know with this test, might be on here for another two years. what are your plans for the next 6 days?

@wanna I had so much time on the test. I checked stuff multiple times and still left with 20 minutes to go. I never learned gov recon, didn't think it would be tested. Don't pass up pension though, don't know if it'll pop up.

[Victor]

Right now I'm reviewing Becker Flash Cards for Gov Accounting (I hate this topic -_-).

I'll do a practice test tomorrow.

And for the rest of the week I plan practicing more multi choice questions and sims.

[IwannabeaCPA2017]

Can someone explain this alternatively?
Question: As a result differences between depreciation for financial reporting and tax purposes, the reporting basis of a company's plant assets exceeded the tax basis. Assuming the company had no other temporary differences, the company should report a :

Answer: Deferred Tax Liability (DTL). I thought it was going to be a DTA because book depreciation being higher than Tax that means we have an unfavorable difference being added back onto taxable income, hence we are at a higher taxable amount. So we pay a higher income tax this year until next year when it becomes deductible we lower our taxable income. So I thought it would be an asset?? I'm confused.

[Sturg]

The tax basis asset must have used an accelerated method of depreciation in order for the Book asset carrying value to be greater than the tax basis.

Example: BV=100-20 depreciation = 80 for book; BV= 100-30 depreciation= 70 for tax). This would mean we will have a future taxable amount, DTL.

[gguzman]

I just almost fell asleep while watching an F10 (gov't accounting) lecture. I think that's the goal of the Gov't; for you to get so bored or confused that you don't care to try to track how tax dollars are spent.

Some aspects are interesting. Something that seems to help me is trying to find a real world application. For example look up your city's government wide financials and appreciate how much more you can understand them.

I just need more coffee. Happy studying!

[Anonymous]

I've been working on Derrivatives and feel like this is way over my head. Is this an area I could “punt” on? I understand the basics of Options, Future, Forwards and Swaps – but anything more than that I feel like I am going to need a week (that I don't have) to master?

Any advice/tips would be appreciate!

[Ana]

@cpa3rd from my experience just know which changes (unrealized G/L and realized G/L) go to income stmt or OCI. I think I posted it here before. here it is:
I feel like derivatives and foreign is pretty simple. always know that transLATION goes to OCI, transaction and remeasurement goes to G/L on IS.
effective cash flow hedge goes to OCI all others goes to G/L on IS, like ineffective and derivatives.
generally if you remember PUFER you'll know the only 2 that go to OCI (F & E), everything else is IS G/L.
the other area I try to remember is that for derivatives you use the forward rate for calcs and for transactions the spot rate.
Does that help at all? I actually like the charts Becker has in that module, they're clean cut and useful.

[Author]

Replies