28th Annual Conference28th Annual Conference

H o l i d a y I n n H a r b o u r s i d eH o l i d a y I n n H a r b o u r s i d e •• I n d i a n R o c k s B e a c h, F l o r i d aI n d i a n R o c k s B e a c h, F l o r i d a

2005 F.A.A.E.2005 F.A.A.E.

Irvin N. GleimIrvin N. GleimSaturday, October 8, 2005Saturday, October 8, 2005

• FASB Update

• CPA Update

• EFAT

AgendaAgenda

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• FASB Overview

• SFAS 151 - 154

• EFAT

Overview of Recent Accounting,Overview of Recent Accounting,Authoritative Pronouncements, and Authoritative Pronouncements, and How They Effect Teaching How They Effect Teaching Introductory and Intermediate Introductory and Intermediate Financial AccountingFinancial Accounting

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http://www.fasb.orghttp://www.fasb.org

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FASB Due ProcessFASB Due Process• 7 Members, Majority Rule• Task force and Technical Staff• Discussion Memorandum• Public Hearing• Public Response• Board Votes on Final Statement

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SFAS 151:SFAS 151: Inventory CostsInventory Costs• Excessive Costs are Expensed

• “Abnormal” in ARB43

• International Harmonization

• No Direct Costing

• G&A Expensed

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SFAS 152:SFAS 152: Accounting for RealAccounting for RealEstate Time-Sharing Estate Time-Sharing

TransactionsTransactions

• Amends SFAS 66 “Accounting for Sales of Real Estate” to adopt AICPA SOP 04-2

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SFAS 153:SFAS 153: Exchanges ofExchanges of nonMonetary Assets nonMonetary Assets

• Amends APB29

• Similar Productive Assets Changed to NO Commercial Substance Transactions

• 25% Boot

• Harmonization

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SFAS 154:SFAS 154: Accounting ChangesAccounting Changes and Error Corrections and Error Corrections

• Change in Accounting Principle now Retroactively Effected Instead of Cumulative Effects

• Includes Depreciation Methods

• Direct Effect Only

• Harmonization

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SFAS 123 SFAS 123 revisedrevised::Share-based PaymentShare-based Payment

• Exchange of Equity for Employee/Services

• NOT ESOP - See SOP 93-6

• Eliminates Intrinsic value method

• Use Fair Value Method

• Harmonization

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Interpretation 47:Interpretation 47: AccountingAccountingfor Conditional AROsfor Conditional AROs

• Asset Retirement Obligation

• Amends SFAS 143

• Tightens requirements for recognizing this cost

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CPA Exam UpdateCPA Exam Update• Computerized Exam is Here• Participation is Down• Pass Rates Are Up 45%• Simulations for BEC and LAW• CMA Exam Update• CIA Exam Update• Careers in Accounting• CPA Review System for Success

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http://www.cpa-exam.orghttp://www.cpa-exam.org

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http://www.prometric.comhttp://www.prometric.com

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Exam BreakdownExam BreakdownFIN 90 m/c 2 sim 4.0 hrs.

AUD 90 m/c 2 sim 4.5 hrs.

REG 72 m/c 2 sim 3.0 hrs.

BEC 90 m/c n/a 2.5 hrs.

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Auditing and Attestation 4.5 hrs.

Financial (80% Fin., 20% Gov.) 4.0 hrs.

Regulation (40% Law, 60% Tax) 3.0 hrs.

Business Environment 2.5 hrs.

Exam SectionsExam Sections

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FIN 4.5 to 4.0 hoursadds 30% of ARE (4.5 hours)

REG 3.0 hours consists of60% of 4.5 hours ARE and100% of 3 hours of LAW

Exam DetailsExam Details

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• Business Structure (20%)

• Economic Concepts (10%)

• Financial Management (20%)

• Information Technology (IT) (25%)

• Planning and Measurement (25%)

Business Environment &Business Environment &Concepts (BEC)Concepts (BEC)

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Multiple Choice ScreenMultiple Choice Screen

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Simulation ScreenSimulation Screen

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• Directions• Situation• Check the Box• Dropdown Boxes• Fill-in Spreadsheet with Formulas• Communication• Research

Tab SimulationTab Simulation

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Exam SectionsExam Sections2004 2nd Quarter = 23,166

2004 3rd Quarter = 40,097

2004 4th Quarter = 46,022

2005 1st Quarter = 35,722

2005 2nd Quarter = 43,045

2005 3rd Quarter = 51,064

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Pass RatesPass RatesPre 2004 = 25 – 36%

2004 - = mid-forties2005

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• Computer Freezes or Locks Up• Candidates Do Not Have 2 IDs or NTS• Copy & Paste Function for Research• Small Issues Become Exam Breakers• Revised Simulation Jan 2006• CPA Forum

Exam IssuesExam Issues

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CMA Exam:CMA Exam: Current vs. ReorganizedCurrent vs. Reorganized1. Economics, Finance &

Management

2. Financial Reporting Analysis

3. Management Reporting, Analysis & Behavioral Issues

4. Decision Analysis, Information Systems & Management Controls

1. Business Analysis

2. Management

3. Strategic Management

4. Business Applications

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CIA ExamCIA Exam• 125 Questions, 3.5 hours• Still Paper and Pencil• High Growth• Computerize Jan 2008

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CIA ExamCIA Exam• Internal Audit Role• Internal Audit Engagement• Business Analysis & Information Technology• Business Management Skills

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28

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• 10 – 15 Minute Audio Visual• 10 True / False Study Questions• Easy Study Sheet• 10 Multiple Choice Question Quiz• 1 – 3 Review Exercises

E.F.A.T.E.F.A.T.Elementary Financial Accounting TutorialElementary Financial Accounting Tutorial

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Thank youand enjoy your day!