[jeff]

SO I know every test is different but does anyone have any insight on what has been heavily tested recently? I take the exam Monday and I need to narrow my focus….Thanks!

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

[Juliemiddle]

@CPA2014 – long story short, I didn't study nearly enough. I only went through the review once, didn't really know how to study (it was my 1st attempt at an exam). There was personal stuff happening that distracted me from studying.

I'm actually surprised I even scored a 68…I had pretty much skipped NFP an Govt. Accounting, which is like the cardinal sin for FAR.

AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONE

CPAExcel, Ninja Audio (all sections)

[rbozung]

Can anyone help me on this? When I am going through the NINJA audio, I cannot keep straight when he says “reporting currency” and “functional currency”, each time that he says it below, if he is talking about the Parent's functional/reporting currency or the Sub's functional/reporting currency (since both can have both): (I did all caps where I need clarification). Thanks!

d. FOREIGN CURRENCY TRANSLATION

ii. If functional (PARENT OR SUB?) currency = local currency

1. Asset and liability translation

a. Use the current rate as of the balance sheet date

2. Revenue and expense translation

a. Use the weighted average exchange rate for the current year

iii. If functional currency (PARENT OR SUB?) = reporting currency (PARENT OR SUB?)

1. Foreign currency financial statements are re-measured into the reporting currency (dollar) using the weighted average exchange rate

a. Historical exchange rates (weighted avg)

i. Inventory at Cost

ii. Prepaid assets & PPE

b. Current exchange rates (weighted average)

i. Monetary assets & liabilities

ii. Inventory at market

iii. Trading securities

iv. Deferred taxes

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[rbozung]

Stock Dividends: This just showed up explaining why a question was right “This question is difficult, because authoritative sources and textbooks disagree as to the market value that should be used to value stock dividends. Small stock dividends (less than 25%) are measured at the market value of the stock issued. But the market value can be measured at declaration or at issuance.”

Does anyone know if you use the date of declaration or the date of issuance?

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[Juliemiddle]

@rbozung – For Translation/Remeasurement, you're only looking for the functional currency of the SUBSIDIARY. (The parent always has the Reporting Currency because they're the ones reporting financials of their sub)

Sub's Functional Currency = Local currency of the country the Sub is in = Recording Currency = Translate

Sub's Functional Currency = same as the Parent = Reporting Currency = Remeasure

Sub's Functional Currency = some other foreign currency = Remeasure, then Translate

AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONE

CPAExcel, Ninja Audio (all sections)

[rbozung]

Thanks, Julie. I use to have this mastered back when I used Becker and now I cannot keep it straight! I still do not follow your second note, “Sub's Functional Currency = same as the Parent = Reporting Currency = Remeasure”. To me this looks like the Sub's functional currency is the same as the Parent's functional currency which is also the same as the reporting currency, so I don't see a need for re-measurement in such a scenario…. Unless, the Sub is reporting on their financial statements in local currency and they need to remeasure to their own functional currency?

My brain hurts…

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[Juliemiddle]

I had the SAME problem when I was learning this. You are assuming the the Recording currency is the same as Reporting currency (why would you re-measure dollars to dollars, right?) But, remember, you've found the Functional currency. The recording currency is still in a foreign exchange. Assume you're dealing with a subsidiary in Switzerland…

Re-Measurement:

Functional Currency = U.S. Dollar

Recording Currency = Swiss Franc

Reporting Currency = U.S. Dollar

Translation:

Functional Currency = Swiss Franc

Recording Currency = Swiss Franc

Reporting Currency = U.S. Dollar

AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONE

CPAExcel, Ninja Audio (all sections)

[rbozung]

Thank you! the NINJA notes have re-measurement under Translation and I have always looked at them separately. I think this is where I went wrong. I just need to ignore that part of the notes.

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[Juliemiddle]

Govt. Accounting question about Estimated Uncollectible Property tax. In CPAExcel it states:

-“Notice that property tax revenue is recognized net of the estimated uncollectible taxes. That is, there is no “Bad Property Tax Expense.”

But, I'm listening to Ninja Audio, and Jeff specifically says (around min. 5 of the Govt. Acct. section):

-“Estimated Uncollectible Property tax revenues do not offset property tax revenues, so don't offset them.”

I'm confused. These statements completely contradict each other, right? I thought recognition is:

DR – Property Tax Receivable

CR – Estimated Uncollectible Property Taxes

CR – Revenue (net amount)

AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONE

CPAExcel, Ninja Audio (all sections)

[rbozung]

Personal Financial Statements: NINJA notes: say that BOTH the statement of financial condition and statement of changes in net worth are REQUIRED. CPA excel and Wiley books: Say that Statement of Financial Condition is REQUIRED but Statement of changes in net worth is OPTIONAL.

Does anyone know which is the correct? My inclination is to go with Wiley and CPA excel….

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[rbozung]

@Julie Middle, I think what Jeff means is that there is no expense (bad property tax expense). So no revenues less: expenses. Rather, there is a “contra asset” if you will “Estimated uncollectible taxes” related to the levy “property taxes receivable” and the revenue is recorded at the net amount. I think the point that is being made, is that an expense doesn't show up to net against the revenues when assessing property taxes receivable like it does when you set up an allowance for bad debt account (DR. Bad debt expense, CR AFDA). They skip that accrual and recognition and just net the amount.

Does this make sense? And your JE is accurate.

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[jeff]

Hate to say it, rbozung, but the Statement of Changes in Net Worth is optional – you are correct. I will need to fix that.

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

[rbozung]

Awesome. Thanks for the clarification!

BEC - Passed
AUD - Passed
FAR - 10/28/14 (waiting results)
REG - Passed

[Anonymous]

Just got out of FAR, my first CPA test experience… feel like I flew through the MCQ until mid second testlet where I had to put some thought into my answers. Govt / NFP felt like it was at least 20% of the questions.

And how can I forget to mention the SIMs. Prepare!! I had 1 hour and 50 min left for all the sims and still had to scramble for time at the end. Really try to know your JEs outside of the norm (pensions/bonds).

[Anonymous]

Thanks agile, your response is similar to many others that have posted, including my own – remember to know Gov't/NFP and know your JE's. Keep repeating and practicing to give yourself the best chance at passing.

DM

[Anonymous]

CPA 2014.0 – FAR

Revenue Recognition, Question # 598

Falton Co. had the following first-year amounts related to its $9,000,000 construction contract:

Actual costs incurred and paid $2,000,000

Estimated costs to complete 6,000,000

Progress billings 1,800,000

Cash collected 1,500,000

What amount should Falton recognize as a current liability at year-end, using the percentage-of-completion method?

At year-end, Falton should record an account receivable of $300,000 (1,800,000 – 1,500,000) and inventory of $2,000,000. However, no current liability exists.

Journal entries:

Construction in Progress 2,250,000

Cash and profit 2,250,000

Accounts Receivable 1,800,000

Progress Billings 1,800,000

Cash 1,500,000

Accounts Receivable 1,500,000

How did they get 2,250,000 for the CIP and Cash and Profit? Thanks.

[Author]

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