[Amay]

I just ran into a question where I was required to know that “accounting fees to prepare the representations in offering materials” are syndication expenses which are not amortizable and must be capitalized.

I am confused as to what these actually are and if we are required to identify them in the exam without them actually stating in the question that it is a “syndication fee.” Can anyone please explain?

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Amay]

Anyone studying for REG who can chime in on this? Really appreciate it 🙂

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[MikeHoncho]

Hey @Amay, syndication fees are the costs of issuing and selling stock. On the exam you must be able to differentiate between syndication, organizational, and startup costs. For example, the exam may give you a question asking which costs are capitalized and which are expensed immediately. It will be up to you to pick out the syndication costs (eg fees paid to underwriters, cost of stock certificates, brokerage fees, legal fees)*

* All of which are associated with the issuing and selling of stock.

Hope that helps!

Done: 5/22/14

"Always do sober what you said you'd do drunk. That will teach you to keep your mouth shut."
- Ernest Hemingway

[Amay]

Thank you!! I am hoping for key words such as “offering” and “issuing/selling stock” because if they just say legal or accounting fees I may confuse that with start-up or organizational costs.

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[MikeHoncho]

Bingo!

Done: 5/22/14

"Always do sober what you said you'd do drunk. That will teach you to keep your mouth shut."
- Ernest Hemingway

[Author]

Replies