- We are back.

Welcome back to another action-packed edition

of CPA Reviewed, the official podcast of another71.com.

As always, I'm your humble host, Jeff Elliott,

a licensed CPA

in the state of Kansas, much to the chagrin of many.

Happy Monday to you.

Today is Monday, January 11th, 2016.

Our first podcast of the year. (giggles)

I looked in our last podcast, it was like

October 15th (laughs) so,

this must be a quarterly thing we've got going on.

So we have two things going on right now.

We have the audio version, so if you're listening

to the podcast,

you have

no indication that

I have not shaved since no shave in November. (laughs)

So, well I did a little bit but,

I was starting to look homeless and getting questions

about being in my building, but...

Anyway, so yeah, I got the no shave in November

still going on strong, so,

my mom hates it, my wife loves it.

So you know who wins that battle.

On today's show, we're going to cover

some CPA exam news.

The 2016 CPA exam changes from a

30 thousand

foot view

and also jump into your questions.

So first, the news.

Okay, the AICPA released the

2015 CPA exam pass rates

and like they do every quarter,

some interesting things about that is that

well, they released the pass rates but then

the NINJAs went back and looked at the

pass rates since 2006.

And some interesting things,

BEC has increased 12 percentage points

since 2006

so right now BEC's pass rate is around a

what, a 55 or 56?

Is that right?

Back in the day it was like a 43? (chuckles)

It's got to be true if...

It was one of my bullet points.

I probably should have looked at that more closely

before hitting the record button, but anyway

BEC has jumped up 12 percentage points.

Yeah, it's like at a 56 right now,

so it used to be 44, 45, somewhere in there.

That's interesting.

Auditing is...

Auditing is kind of strange because if someone told me

that they scored a 99 on the exam, on any particular exam,

I would say, okay it was auditing.

And most of the time that's true.

Like I rarely see a 99 for regulation.

Maybe one for BEC, maybe for FAR,

but I'm not surprised when I see someone score

a 99 on auditing anymore.

And usually if you see someone gunning for the

Elijah Watts Sells Award, they have like a 99

on auditing and a 93 on BEC.

But usually it's auditing score that anchors

that Elijah Watts Sells Award.

But oddly enough, possibly ironically,

auditing is also

also has the lowest pass rates, typically.

And

but this time, auditing is actually up a little bit,

and Q4

and it's right in there with FAR.

So auditing scores came up.

And the AICPA also released the score release timeline

for Q1 and it's basically the same

timeline as last year,

just slap a 2016 on it and adjust

for the weekend dates and what not.

But

you can get the links to the AICPA 2015 pass rates

as well as the 2006

through 2015 pass rate

comparison below this video.

If you're watching this on YouTube, just click

the link in the description, if you're watching

this one another71, it's right below the video,

and if you are listening to a podcast

you have nothing to click.

You can go to my site and see it.

Okay, and one other thing about the score release

and

there's no indication that this will change,

but the scores have been coming out at 1:00 a.m. eastern.

Why they do that, I really don't know.

I think the original intent was that they thought

people would just forget about it and go to sleep

and then wake up and their scores would be there.

But clearly they don't read another71 enough because

people, it doesn't matter if you tell them

it's coming out at 3:00 a.m.

People will be on the site hitting Refresh at 3:00 a.m.

So you might as well make it 7:00 p.m., 10:00 p.m.

Whatever, the server load is going to be consistent

regardless, so let's just let the poor people sleep

or get some rest.

2016 CPA exam changes.

I'm going to go through this pretty quickly,

pretty high lever overview.

Basically for BEC there were not any substantial changes,

anything that you need to worry about.

BEC is good to go.

Auditing.

The big changes happened in July of 2015 with

SSARS 21.

So if you have July

2015

updates for your auditing course,

you're good to go.

Regulation, the big changes for regulation

happen mid-year.

So

2015 tax law has been tested from

July 1st 2015

through June 30th 2016.

June is obviously a dead month, so it's

through May 31st 2016.

Hope I said that right.

June 30th 2016.

So basically

the 2016 tax law will begin to

be tested

July 1st of 2016.

So,

long story short,

if your regulation materials

are updated, as of July 2015, you're good to go.

FAR.

FAR was kind of a bear this time around.

And as someone who has to

do all the exam changes themselves,

it was quite an ordeal.

I'm glad I started in November

so that I got it out before Christmas.

But the reason why FAR was kind of a

bear this time around was because

one of the things in the past we did was they did away

with the extraordinary items classification.

So they actually did that a while back

but it's just now CPA exam testable,

and so now

any unusual or infrequent items,

they either go on the income statement

above income from continuing ops

or they go in the footnotes.

So you have two ways you can do it there.

One other little note is that they are no longer shown

net of tax.

And so when you pull out extraordinary items,

Like any, I mean, just think of all the

multiple choice questions they had,

extraordinary items in them.

Any, like all of the example financial statements,

they all had to be redone.

(mimicking somber violin)

But...

So anyway,

but it's all done now.

And it was done before Christmas.

And also, bond issuance cost.

So before you would...

The bond issuance cost would go on the balance sheet.

And that is no longer the case.

Bond issuance costs reduce

the bond carrying value.

So that is a change going concern.

So if management decides that there's substantial

doubt that the entity will continue as a going concern

within 12 months of the financial statement issuance date,

they have to issue some disclosures.

So option A is

yeah, there's a problem but we have a plan

and we think it's going to work.

Here is the problem, here's our plan,

and here's why we think it's going to work,

here's our disclosures.

Or, yeah,

there's a problem, we have a plan,

we don't think it's going to work

here's why it's not going to work

here's the problem, and here's our disclosures.

So those are now the two options.

If there is substantial doubt about any entity's

ability to continue as a going concern.

What else?

Oh, governmental accounting.

Governmental accounting had some

some stuff added to it.

Fair value measurements for investments and liabilities,

so there's some stuff in there.

Also the way that you measure donated items are in there.

There's also now a gap hierarchy for state

and local governments.

And basically

there's two types, authoritative and non-authoritative.

Kind of like regular

regular accounting.

So, you need to know that.

If your materials for BEC, auditing, and regulation

are updated as of July 2015

you should be good to go.

Now, if your

if you have FAR materials,

you need to have the 2016 version,

either of your materials,

or

if you want some

amazing materials that

don't cost the price of a really nice cruise,

then you can get some NINJA materials.

There's free downloads on the site.

Some free demos as well.

All right.

End of that marketing message.

But many more marketing messages to come.

I promise.

Let's jump into your questions.

Okay, so backing up, I'm from Kansas.

I live out in the country and I'm not very cultured.

And so if you have a foreign sounding name,

chances are, more likely than not,

that I'm going to butcher it.

So I apologize in advance,

which is actually one of my pet peeves.

People who either apologize in advance

or thank someone in advance.

But anyway...

Like when someone says, "Hey, I need,

give me some advice, TIA, thanks in advance."

It's like one of my little pet peeves.

But I apologize in advance.

Rashit says,

"I intend to appear

for FAR, reg, and auditing

in the third quarter of 2016.

If I buy the NINJA books now, would they include

all of the relevant updates and amendments?"

The short answer is no, because there will be

some July updates, especially for regulation,

but the good news is that NINJA materials

come with free updates until you pass.

So you can buy it now or buy it later

if you're not going to

study until third quarter, you might as well wait.

Stella writes in,

"I have only one exam left, which is auditing.

I bought your multiple choice questions to practice.

My earliest credit that I will lose is FAR

and I will lose it February 24th 2016.

I plan to take my last exam on or before February 14th.

Would that be risky?