[jeff]

Welcome to the Q1 2017 CPA Exam Study Group for FAR. 🙂

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

[cdn]

Thank you everyone – and will let you know tomorrow after test. Now just quick grasp on my notes and taking or at least trying a good sleep.

[Cruzer]

Question: I thought impairment occurs when the undiscounted future cash flows < carrying amount of assets. If the answer is “yes” they are, then take fair value less carrying amount and record this as your impairment loss. On Becker F1-24 it gives an example of a discount. ops but never mentions a word about the undiscounted cash flows and compares the FV to the CV for impairment. Am I missing something here?

[Spartans92]

hey guys! I am officially back in here. My new book just came in the mail and will start again tomorrow. For those that are retaking in Q2.. do you suggest watching the lectures again since this is the “new” format? Thanks

BEC- PASS

[norseman88]

@Cruzer I think where you're getting tripped up due to the classification of the assets. You are correct for GAAP on impairment of Long Lived Assets CLASSIFIED AS HELD AND USED = Carrying Value > Undiscounted FCF.

On Becker F1-24, this is a component unit that is HELD FOR SALE with a DISPOSAL plan approved by the board so it is accounted for in income from discontinued operations. A component classified as HELD FOR SALE is measured at the lower of its carrying amount or fair value less costs to sell (NRV). Also, once the component is classified in Discontinued Operations and G/L and impairment is calculated, assets within the component are no longer depreciated or amortized.

[norseman88]

@Spartans92 I believe most people in here are testing in Q1 so not using that version

[cmrn89]

hey @spartans92 I'm studying for Q2 as well. It'll be my first time, but per Jeff's advice, treat your retake as your first time prepping and go through the whole process again. Someone mentioned before that the lectures do not align very well with the skills practice and MCQ's, but I do not find that to be the case. You definitely do most of your learning going through the MCQ's; however, I think the lectures and note taking is important. I will warn you, Tim Gearty's lectures are hard to sit through. They should have had Olinto do all of them hah. I'll see you in the Q2 forum!

[Namstut]

@cruzer, GAAP impairment test is a 2-step test.

1. Compare FV to Undiscounted Future Cash Flows. If FV is less then the impairment exist, move to the next step
2. FV – Net Carrying Value = Impairment

You stated that impairment occurs when the undiscounted future cash flows < carrying amount of assets.. You should use FV and undiscounted future cash flow, not carrying amount to test whether or not there is an impairment.

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[mtaylo24]

@Spartans92 How was auditing?

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[Spartans92]

@mtaylo, uhhh Im not too sure on that one haha. The mcq were fair but SIMS.. Its gonna be make or break for the 75. Hopefully it will be in my favor. Good luck with FAR!

BEC- PASS

[mtaylo24]

Man, I hated that section…I really hope you pass!

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[norseman88]

@Namstus this is on HELD FOR USE Fixed Assets

Under GAAP a fixed asset is first tested for impairment. If the sum of the undiscounted expected future cash flows is less than the carrying amount, an impairment loss needs to be recognized. The amount of the impairment loss is the amount by which the carrying amount exceeds the fair value of the asset.

[NYaccountingstudent]

I havent even looked at the NINJA SIMS yet

I think tomorrow im going to take a break from NINJA MCQ and spend all day watching BOBs videos on my trouble areas and also doing sims

My test is Friday

[Namstut]

@cruzer, check out F4-55. There is a nice chart. I think the rule applies to both, Assets Held for Use and Assets Held for Sale. The only difference in the calculation of the impairment for Held for Sale is that you have to add the cost of disposal to the total impairment loss. Check out that chart and please correct me if I am wrong.

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[Cruzer]

@NYaccountingstudent I think that's a good idea at this point. I've done around 1700 MCQ's and have 200 new ones still to do (all govt and NFP). Plan on finishing those by Wednesday mid-day. Pretty much trying to get every single section of MCQ's over 70% trending so I can walk in the exam and crush the thing. I wrote down 18 SIMS to look over and have done 2 w extensive an. Time is running low. At this point I am going to spend 50% of my time on Govt and NFP review 7 important SIMS I think could be tested and listen to Bob's videos on various topics.

[Namstut]

@cruzer, I can't even read anymore. I reread your statement and I finally see what you are referring to! He is taking net realizable value, which is Fair Value less Cost to Sell.

Edit: I think it's because once you classified it as discontinued operations you don't expect any future cash flows so you have to use Fair Market less Cost to Sell to determine the impairment. I am pretty sure I read it in one of the chapters, but I can't find it right now.

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[Author]

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