[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

[kdcpa]

@Lentilcounter thank you so much. You have explained it really well. I understood from your explanation that basic EPS denominator includes 2000 shares because the bonds are already converted on July 1 year 3. But while calculating dilutive EPS $2.85, the denominator should be 12000 shares considering the conversion of bonds into shares, but why does the answer explanation show 14000 shares in the denominator? Isn't it a double counting?

[Lentilcounter]

@KDCPA

I understand what you are saying and here is what I think.

The bonds converted into common shares and weighted for the purposes of BEPS denominator is 20*200*6/12 = 2,000
10,000(12/12) + 4,000(6/12) = 12,000 shares = denominator for BEPS

For DEPS, its the following calculation:
10,000(12/12) + 4,000(12/12) = 14,000 shares = denominator for DEPS

I think when you include potentially dilutive securities in the denominator, you assume it happens right away. I don't know why the explanation says 12,000 + 2,000. You get the same answer of 14K but its difficult to follow.

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

[kdcpa]

@Lentilcounter now it makes much more sense to me. Thank you so much.

[Lentilcounter]

You are very welcome, friend.

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

[PVMLP]

Hello Ninjas, I have FAR coming up December 7th. I want to pass before the revenue recognition changes take place next year, so I am throwing a hail mary and taking it on the absolute last day of the testing window. I am using Roger right now and am about halfway through the course. I am thinking about supplementing with either Wiley or Ninja testbank, any suggestions from a FAR veteran?

Good luck to everyone.

[HoldMyBeerCPA]

Is FAR the only exam you're taking between now and December?

If so, I think you have plenty of time. I think that you could get away with just NINJA MCQ.

I felt as if Roger's book and MCQs were enough to prepare me for the exam. The NINJA MCQs were the perfect supplement for additional notes on smaller things I missed (though the government/NFP) questions on NINJA were WAY harder than the exam.

[cottonkandi]

A company that uses IFRS reports the following information as of December 31:

Pension gain 175,000
Foreign currency translation loss 120,000
Revaluation surplus from revaluation of fixed assets 50,000
Unrealized gain on available­for­sale security 32,000
Unrealized loss on trading security 20,000
Revaluation loss from revaluation of intangible assets 18,000

What amount should the company report as other comprehensive income as of December 31?

A. $17,000
B. $55,000
C. $99,000
D. $137,000

The answer is D but I don't understand why revaluation loss from revaluation of intangible assets was not included.

[BatmanInTraining]

Hey @cottonkandi if you think about the PUFER numanic (if you use Becker), it would include the Pension gain, unrealized gain/loss on AFS securities, Effective hedging, and only the Revaluation surplus. The revaluation losses would be to Net income. However revaluation losses can go to OCI if there is an already placed surplus, but the problem doesn't deal with previously recognized revaluation losses/gains so that is irrelevant. Hope this helps, and anymore questions ill do my best to explain haha, Im still not perfect when it comes to CPA.

[PVMLP]

@TurboSandwichCPA

Yea, this will be the only exam I take between now and then. I was originally planning to take FAR in October and AUD in December but reevaluated the time I would need to prepare after getting going with Roger. When you used Roger how many times did you do the IPQ's before going on to the next section? I've read a variety of approaches throughout these forums. I always feel bad moving on to the next section especially if I didn't score as well as I would've liked. I figure during my review a couple weeks before the exam I will go through and just pound the MCQ's (so I can go through them 2-3 times like Roger suggests). How did you implement the Ninja MCQ into your studies?

Thanks

[cottonkandi]

@BatmanInTraining – Thanks so much for clarifying. I missed that revaluation only includes surplus, for some reason I thought it was both surplus and losses.

[LCS]

Hey guy I will be taking FAR for the second time in December.
Can you guys please help me out on clarifying revaluation losses from IFRS?
Does the loss go straight to Net Income? Or does it go to OCI first then to Net Income.
Thanks!

[BatmanInTraining]

@cottonkandi no problem whatsoever, and remember to keep up the training and you'll be able to beat this exam with your fist! But mostly your brain.

@LCS I can definitely do my best, so as I mentioned a couple response above the PUFER nemonic is really useful for understanding anything OCI related. However the “R” in PUFER is for IFRS only and deals with Revaluation surpluses which would be to OCI. Revaluation losses would be to Net income. HOWEVER, there is of course exceptions. IF, there is previously recognized revaluation loss in net income, then you have a revaluation surplus that exceeds the previous loss, then that amount is added back to net income, and the excess to OCI. If there was a previously recognized surplus in OCI, and then a loss later on then that loss would reduce OCI up to the surplus amount, any excess is to Net income. Its the little tricky rule. I hope that helps, any more questions I can do my best.

[LCS]

This is very thoroughly explained. Thanks so much @BatmanInTraining!

[EStone]

Can someone help me with clarity on accounting changes and errors? This topic just isn't clicking with me as there are so many exceptions to the rules. If someone could explain the difference between change in estimate, change in principle, change in entity, and a change in error, I would really appreciate it.

Thanks

[BatmanInTraining]

Hey @EStone Id be happy to try! So think about them separately at first:

Change in Estimate – Primarily deal with change in depreciation,(also if you switch TO Lifo however might wanna double check that), and are handled PROSPECTIVELY, meaning there is no change to beginning retained earning or prior Financial statements.

Change in Principle – These are changes in accounting principles which could be inventory evaluation (with the exception of the Lifo thing), revenue recognition (installment, completed contract, etc). And are handled RETROSPECTIVELY, meaning there should be a change in beginning retained earnings and restated financial statements.

Change in error- These are errors recognized from previous periods and are done as prior period adjustments usually to retained earnings.

Change in entity – this one I'm a little shaky on, however I think it mostly deals with when a parent acquires a sub and deals with consolidated financial statements. Its a pretty niche rule.

[Author]

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