CPA FAR EXAM WITH 100% CORRECT ANSWERS LATEST UPDATE
Identifying a Variable Interest (VIE) - ANSWER All Must be Met:
1. There is an arrangement between company and business entity
2. Business entity is a legal entity
3. Business fails to qualify for an exclusion
4. Interest is more than insignificant
5. The company has an explicit or implicit variable interest in the entity
Securities and Exchange Commission - ANSWER - established in 1934 by Securities and
Exchange Act
- all public and large private companies are subject to their rules and regulations
- has promulgated specific accounting rules and regulations in Regulation S-X, Financial
Reporting Releases (FRR), Accounting Series Releases (ASR), Interpretative Releases
(IR), etc.
Committee on Accounting Procedures - ANSWER established GAAP from 1939 to 1959
- part-time committee of the AICPA that issued Accounting Research Bulletins
Accounting Principles Board - ANSWER established GAAP from 1959 to 1973
- part time committee of the AICPA that issued Accounting Principles Board Opinions
and APB interpretations
Financial Accounting Standards Board - ANSWER established in 1973 and has
determined GAAP ever since then
- up to 2009 issued Financial Accounting Standards, FASB interpretations, FASB
technical Bulletins, Emerging Issues Task Force Statements, FASB Staff Positions,
FASB implementation Guides, and Statements of Financial Accounting Concepts
,- has 7 full time members with 5 year terms
FASB Accounting Standards Codification - ANSWER - codified on July 2009
- became the single source of authoritative nongovernmental US GAAP
FASB updates to ASC & SEC content - ANSWER - FASB amendments issued for public
comment through exposure drafts
- majority vote of the Board need to approve an exposure draft for issuance
- FASB staff analyzes all comment letters from public and then the Board re-deliberates
the issue
- FASB staff prepares an Accounting Standards Update for Board
- majority vote of Board needed to amend the ASC
.
IASB - ANSWER established in 2001 as part of the International Financial Reporting
Standards Foundation
.
FASB Conceptual Framework - ANSWER - statements of financial accounting concepts
-serve as basis for financial accounting concepts for business and nonbusiness
enterprises
- NOT GAAP, just basic reasoning of why
Objective of General Purpose Financial Reporting - ANSWER to provide financial
information about the reporting entity that is useful to the primary users in making
decisions about providing resources to the reporting entity
Form 10-K Deadlines - ANSWER - Large Accelerated = 60 days
- Accelerated = 75 days
- All Others = 90 days
,Form 10K - ANSWER must be filed annually by US registered companies
- includes financial disclosures, such as financial data summary, management's
discussion and analysis, and audited financial statement prepared by using generally
accepted accounting principles of the United States
Form 10Q - ANSWER filed quarterly by US registered companies
- comprises unaudited financial statements, interim period MD & A and certain
disclosures
Form 10-Q Deadlines - ANSWER - Large Accelerated = 40 days
- Accelerated = 40 days
- All Others = 45 days
Form 11K - ANSWER Employee Benefit Plans
Form 20 F - ANSWER - non US annual report
Form 40 F - ANSWER Canadian annual report
Form 6 K - ANSWER filed semiannually by FOREIGN private issuers
similar to 10-Q
Form 8 K - ANSWER reports major events
Ex: new CEO, audit firm, asset acquisitions, disposals
Forms 3, 4, and 5 - ANSWER forms required by 10% owners
Interim Financial Reporting - ANSWER - Balance Sheets: end of the most recent fiscal
quarter and as of the end of the preceding fiscal year
- Income Statements: most recent fiscal quarter, for period between the end of the
preceding fiscal year and the end of the most recent fiscal quarter, and for the
corresponding periods of the preceding fiscal year
, and for the period of 12 consecutive months ended during the most recent fiscal quarter
& corresponding preceding period
Statement of Cash Flows: For the period from the beginning of the preceding fiscal year
to the end of the most recent fiscal quarter, and for the corresponding period of the
preceding fiscal year;
the period of 12 consecutive months ended during the most recent fiscal quarter and for
the corresponding preceding period
Annual Financial Reporting - ANSWER - 2 Balance Sheets
- 3 Income Statements
- 3 Cash Flows
- 3 Changes in Owner's Equity
Annual financial Reporting IFRS - ANSWER - 2 balance sheets
- 2 statements of comprehensive income
- 2 statements of changes in equity
- 2 statements of cash flows
XBRL - ANSWER software that uses XML to electronically file data and link it
Tag - ANSWER a machine readable code
includes descriptive labels, definitions, references to US GAAP that provide contextual
information
instance document - ANSWER XBRL formatted document that contains tagged data
SEC interactive data rule - ANSWER requires US public companies to present financial
statements using XBRL
Identifying a Variable Interest (VIE) - ANSWER All Must be Met:
1. There is an arrangement between company and business entity
2. Business entity is a legal entity
3. Business fails to qualify for an exclusion
4. Interest is more than insignificant
5. The company has an explicit or implicit variable interest in the entity
Securities and Exchange Commission - ANSWER - established in 1934 by Securities and
Exchange Act
- all public and large private companies are subject to their rules and regulations
- has promulgated specific accounting rules and regulations in Regulation S-X, Financial
Reporting Releases (FRR), Accounting Series Releases (ASR), Interpretative Releases
(IR), etc.
Committee on Accounting Procedures - ANSWER established GAAP from 1939 to 1959
- part-time committee of the AICPA that issued Accounting Research Bulletins
Accounting Principles Board - ANSWER established GAAP from 1959 to 1973
- part time committee of the AICPA that issued Accounting Principles Board Opinions
and APB interpretations
Financial Accounting Standards Board - ANSWER established in 1973 and has
determined GAAP ever since then
- up to 2009 issued Financial Accounting Standards, FASB interpretations, FASB
technical Bulletins, Emerging Issues Task Force Statements, FASB Staff Positions,
FASB implementation Guides, and Statements of Financial Accounting Concepts
,- has 7 full time members with 5 year terms
FASB Accounting Standards Codification - ANSWER - codified on July 2009
- became the single source of authoritative nongovernmental US GAAP
FASB updates to ASC & SEC content - ANSWER - FASB amendments issued for public
comment through exposure drafts
- majority vote of the Board need to approve an exposure draft for issuance
- FASB staff analyzes all comment letters from public and then the Board re-deliberates
the issue
- FASB staff prepares an Accounting Standards Update for Board
- majority vote of Board needed to amend the ASC
.
IASB - ANSWER established in 2001 as part of the International Financial Reporting
Standards Foundation
.
FASB Conceptual Framework - ANSWER - statements of financial accounting concepts
-serve as basis for financial accounting concepts for business and nonbusiness
enterprises
- NOT GAAP, just basic reasoning of why
Objective of General Purpose Financial Reporting - ANSWER to provide financial
information about the reporting entity that is useful to the primary users in making
decisions about providing resources to the reporting entity
Form 10-K Deadlines - ANSWER - Large Accelerated = 60 days
- Accelerated = 75 days
- All Others = 90 days
,Form 10K - ANSWER must be filed annually by US registered companies
- includes financial disclosures, such as financial data summary, management's
discussion and analysis, and audited financial statement prepared by using generally
accepted accounting principles of the United States
Form 10Q - ANSWER filed quarterly by US registered companies
- comprises unaudited financial statements, interim period MD & A and certain
disclosures
Form 10-Q Deadlines - ANSWER - Large Accelerated = 40 days
- Accelerated = 40 days
- All Others = 45 days
Form 11K - ANSWER Employee Benefit Plans
Form 20 F - ANSWER - non US annual report
Form 40 F - ANSWER Canadian annual report
Form 6 K - ANSWER filed semiannually by FOREIGN private issuers
similar to 10-Q
Form 8 K - ANSWER reports major events
Ex: new CEO, audit firm, asset acquisitions, disposals
Forms 3, 4, and 5 - ANSWER forms required by 10% owners
Interim Financial Reporting - ANSWER - Balance Sheets: end of the most recent fiscal
quarter and as of the end of the preceding fiscal year
- Income Statements: most recent fiscal quarter, for period between the end of the
preceding fiscal year and the end of the most recent fiscal quarter, and for the
corresponding periods of the preceding fiscal year
, and for the period of 12 consecutive months ended during the most recent fiscal quarter
& corresponding preceding period
Statement of Cash Flows: For the period from the beginning of the preceding fiscal year
to the end of the most recent fiscal quarter, and for the corresponding period of the
preceding fiscal year;
the period of 12 consecutive months ended during the most recent fiscal quarter and for
the corresponding preceding period
Annual Financial Reporting - ANSWER - 2 Balance Sheets
- 3 Income Statements
- 3 Cash Flows
- 3 Changes in Owner's Equity
Annual financial Reporting IFRS - ANSWER - 2 balance sheets
- 2 statements of comprehensive income
- 2 statements of changes in equity
- 2 statements of cash flows
XBRL - ANSWER software that uses XML to electronically file data and link it
Tag - ANSWER a machine readable code
includes descriptive labels, definitions, references to US GAAP that provide contextual
information
instance document - ANSWER XBRL formatted document that contains tagged data
SEC interactive data rule - ANSWER requires US public companies to present financial
statements using XBRL
