NINJA CPA REVIEW

FAR ASSASSIN 2012

Table of Contents (v. 12.0)

The NINJA CPA Review Framework I. IFRS 8 II. Accounting Changes 19 III. Financial Reporting 20 IV. Bonds & Debt Restructure 34 V. Consolidations 43 VI. Deferred Taxes 46 VII. Derivatives, Hedging, & Translation 48 VIII. Fixed Assets 51 IX. Governmental Accounting 57 X. Personal Financial Statements, Segments, & Interim Reporting 65 XI. Partnership Accounting 68 XII. Inventory 70 XIII. Investments 76 XIV. Leases 78 XV. Current Assets & Liabilities 83 XVI. Not-For-Profit Accounting 85 XVII. Pensions 91 XVIII. Statement of Cash Flows 93 XIX. Stockholders Equity 95

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The NINJA CPA Review Framework NAIL THE VIDEOS

Watch your CPA Review videos first before working any assigned homework questions. The CPA Review industry says to watch a section of CPA Review video and then work the accompanying MCQs. This perspective stems from the old-school approach to the paper and pencil exam where you had to sit in a live classroom and learn from an instructor on weekends. Today, there is a smarter way to study. You dont have to go to a weekend live course. You can fire up the laptop on a Tuesday morning and knock out two hour of material before you even brush your teeth. If you work MCQs in week one over your week one topic, guess what? you will work them again in week 5 or 6 when you review because you will forget what you learned. If you watch a video in week one and score an 85 on the corresponding MCQs, will you be able to score an 85 four weeks later? Not likely. You will need to work them again anyway and its not a smart use of study time. Instead, let the NINJA Framework guide you.

INTENSE NOTES
Repeat after me: PUT THE HIGHLIGHTER DOWN. Which method do you think will help you learn the material better painting printed words in a book with pretty florescent colors or writing them down on a legal pad and thinking about the information?

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Grab a stack of legal pads, put the highlighter down, and start writing. Many people have said that instead of taking their own notes, they just re-write the material inside of this study guide, which is fine too.

NON-STOP MCQS
Now is the time to start working multiple-choice questions and do them with a focused frenzy. Do so many MCQs that youre absolutely sick of them. As you encounter little fact nuggets that you didnt know or are prone to forget, write it down and add it to your voluminous stack of notes.

JUST RE-WRITE IT
This is where it gets tedious. This is also where the pay off happens. You may be familiar with the fact that if you had a choice between $3 Million and 1 doubled daily for 31 days, the penny doubled for 31 days ends up tripling the $3 Million. The payoff, however doesnt happen until the 31st day. The road is long, but ends up being worth it in the end. The same goes for re-writing your study notes. The thought of grabbing that stack of legal pads and going to town rewriting what youve already written may sound like a ridiculous suggestion at first, but I am a firm believer in its impact. Merely writing down your notes and then reviewing them before your exam doesnt have near the impact as taking your furious scribbles and converting them into re-packaged, easily-digestible fact nuggets. Not only will your notes mean more when youve whittled away the non-essentials, but you are actually learning the
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material twice. Re-processing the material by re-writing your notes is like letting the information marinade in your mind. Just like a well-prepared steak, you will taste the payoff of this extra step. Dont like taking notes? No problem. Re-write these NINJA Notes instead. You will absorb the material better vs. reading only. Plan wisely because this will likely take a week to complete. I have found this to be unbelievably helpful! This is now my second section that I have followed this piece of advice and, once again, I am amazed at how much the material "clicks" as I review and write the notes a second time. Sure, it's time-consuming, but for me, it is worth it. No questions asked. Not only does it help with processing and understanding the material, but it also results in a better, more organized set of study notes to use for review up until exam date. Sandy

ALL COMES TOGETHER

You have watched the videos. Youve taken ridiculous notes and have done hundreds (thousands?) of multiple-choice questions. Youve re-written your notes. Now, study that stack of review Gold in your hands multiple times, work MCQs over weak topics, study your notes even more, and then go in and PASS the CPA Exam.

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How to use the NINJA ASSASSIN

READING You've invested in the ASSASSIN, now let it go to battle for you. You should read the ASSASSIN as many times as possible. Carry it with you wherever you go. Do you have an iPhone, iPad, or similar device(s)? Simply load the PDF onto the device and if you have 5 minutes of downtime, you have 5 minutes of study time. It is recommended that you read the ASSASSIN at least five times leading up to your final two weeks of exam prep. If you have 6 weeks to study, then you need to complete this is 4 weeks. 5 weeks to study, then complete it in 3. 4 weeks = 2 weeks. You get the picture. The point is: plan, plan, plan and budget, budget, budget, budget because exam day is looming. 6-Week Plan: Approx. 103 pages x 5 reads /4 weeks / 7 days per week = Approx. 18 pages per day 5-Week Plan: Approx. 103 pages x 5 reads /3 weeks / 7 days per week = Approx. 24 pages per day 4-Week Plan: Approx. 103 pages x 5 reads /2 weeks / 7 days per week = Approx. 37 pages per day 3-Week Plan: Approx. 103 pages x 5 reads /1 weeks / 7 days per week = Approx. 74 pages per day

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RE-WRITING This step is optional, but it won over a lot of skeptics with its results. This is not mainstream advice. This is the NINJA way. The mainstream way of studying for the CPA Exam is old-fashion and outdated. Forget the old way. You are a NINJA now.

Now is the time to either 1. Re-write your own CPA Exam notes or 2. Re-Write the ASSASSIN Notes. Plan on investing a week doing this and you should expect to get through 15 pages a day (Approx. 103 pages / 7) in order to stay on track. After this, you will still have one week left to put the finishing touches on your CPA Exam review prep i.e. doing a ton of MCQs.

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IX. Governmental Accounting

GOVERNMENTAL ACCOUNTING BASICS ! Primary Objective o Provide information that is useful and benefits a wide range of users including " Cost of Services provided " Sufficiency of Revenues to cover costs " Financial Position of the Entity ! Fund Types o Governmental o Proprietary o Fiduciary ! Accounting - Two Types o Accrual Basis " Current Economic Resources Focus " Revenues recognized when " Earned o Modified Accrual Basis " Current Financial Resources Focus

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" Revenues recognized when " Available " Measureable ! Budget Estimates o Appropriation " The highest amount allowed for an expenditure o Encumbrance " Records purchases and reserves it for the encumbrance ! Budget Actuals o Expenditure " The actual cost of something ! Opening Budgetary Entry Dr Estimated Revenues Control Cr Appropriations Control Dr/Cr Budgetary Fund Balance (plug) ! Closing Budgetary Entry Dr Appropriations Control Dr/Cr Budgetary Fund Balance (plug) Cr Estimated Revenues Control GOVERNMETAL FUNDS ! Modified Basis of Accounting

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! Current Financial Resource Focus ! Revenue Recognized when available and measureable o Sales tax revenue to be received within 60 days of the fiscal year end that will be used to fund expenditures made prior to year end are treated as revenue in the current fiscal year ! GSP-CD ! General Fund o The Operating fund of the governmental unit " Records Significant Revenues " Taxes " Tickets " Fines " Licenses " Records Significant Expenditures " Police " Education " Fire Dept ! Special Revenue Fund o Restricted for a specific purpose such as street repair

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! Permanent Fund o Legally restricted o Only earnings can be used to fund programs o Principal remains intact ! Capital Projects Fund o Used to acquire and build facilities ! Debt Service Fund o Handles repayment of long-term debt and related interest ! Governmental Fund Statements o Balance Sheet o Statement of Revenues, Expenditures, and Changes in Fund Balance ! Revenue Recognition o Is it available? o Is it measureable? o If yes its revenue, regardless of when it is spent ! Derived Tax Revenue o Collected by people doing things " Buying cars
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" Sales Tax " Going to work " Income Tax ! Imposed Tax Revenue o Assessed just because things exist " Property Tax on car " Your car could sit in the driveway all year and never move. The fact that it exists means it gets taxed " Real Estate Tax o Recorded as Revenue when Budgeted ! Estimated uncollectible property tax revenues dont offset revenues, so dont net them PROPRIETARY FUNDS ! Accrual Basis of Accounting o Orientation is Income Determination ! Economic Resource Focus ! Revenue Recognized when earned and measureable ! Internal Service Fund o Serves the needs of other governmental units o Example: Motor Pool fixes government vehicles
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! Enterprise Fund o Provides goods or services to external users o Example: Post Office ! Proprietary Fund Financial Statements o Statement of Net Assets o Statement of Revenues, Expenses, and Changes in Net Assets o Statement of Cash Flows FIDUCIARY FUNDS ! Accrual Basis of Accounting ! Economic Resource Focus ! Agency Fund o Government acts as an agent or custodian ! Pension Trust Fund o Government is a trustee for a pension plan

! Investment Trust Fund o Government is trustee over a series of investments

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! Private Purpose Trust o Trust that benefits various individuals and entities GOVERNMENT-WIDE FINANCIAL STATEMENTS ! Accrual Basis with Economic Measurement focus ! Statement of Net Assets o Assets and Liabilities " Ordered by liquidity " Current and Non-Current o Restricted Net Assets o Unrestricted Net Assets o Capital Assets " Net of debt o Divided into " Government Activities " Business Activities

o Capital Assets are shown Net of Debt Asset Cost -Accumulated Depreciation -Asset Liabilities
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Net Assets o Infrastructure " Modified Approach " Reported at Cost " No Accumulated Depreciation ! Statement of Activities o Government activities divided by function o Revenues " General Revenues " Program Revenues ! Notes to Financial Statements o Notes are considered part of the Financial Statements ! Presentation o If the activities of a component are distinguishable from the rest of the governmental entity, then Discrete Presentation is required

o If the activities of the component cannot be identified and separated from the rest of the governmental activities, then Blended Presentation is warranted.

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o Component units are reported in the Entity-Wide Financial Statements and not the Fund Financial Statements.

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