So I finished intercorporate investments last week and I realized that we do not need to learn about the old purchase methods that we were required to learn in lvl 2 last June. Has any other retakers realized that? They mentioned it in the CFAI books but it looks like we only need to know the Acquisition - Goodwill and Acquistion - Partial Goodwill methods. Can anyone confirm?
u guys suck lol. I guess I will get a response sometime in Feb or March
in general I have found the Level II boards to be much less participative. JP - in answer to your question above - yes - the Purchase method is out - and they have the acquisition method covered. I have read the stuff once, this was a chapter that always looked good while reading, but very heavy on facts. I need to read it a couple of times more to make out what they are saying. However, if you have any specific questions, send them across - and we’ll try to solve them together.
Yup, you’re correct on that one JP, I noticed that as well. One of the study tips boxes in my Stalla guide warns of a question that asks about the pooling of interests method, but you shouldn’t have much trouble with that. I also noticed that the minority interest is now considered a party of equity per SFAS 160, it is no longer in the mezzanine between liabilities and equity. I don’t mean to hijack this thread, but I did come across a question in relation to FX gains and losses for an AFS debt security. Can anyone explain why FX gains and losses are based on the security’s change in amortized cost in the foreign currency? I don’t have the CFAI materials with me, but is this covered somewhere in the reading? Stalla stumped me with this one.
bpdulog Pg 12, CFAI Vol 2. IFRS and US GAAP differ on the treatment of FX gains / losses on AFS Debt Securities Under IFRS - Debt security is treated as though it were carried at Amortized cost in the foreign currency. Exchange rate differences arising from changes in amortized cost are recognized in profit and loss, and other changes in carrying amount are recognized in OCI. Total Change in FV of an AFS Debt Security is divided in to two components - any portion attributable to FX gains and losses are on the Income statement, while remaining portion is recognized on the OCI. In US GAAP - entire amount including FX Gains and Losses is included in OCI. For Equity securities - both IFRS and US GAAP - there is no separate recognition. Any change in Fair value is on the OCI.
Thanks CP and bpdulog. FSA is my strong suit. It’s actually 1 of the 3 sections I passed in lvl 2 from June lol. Thanks for the help fellas. I’ll keep the questions coming the deeper I dive in. Just finished reading over pensions. Everything seems to be the same here. Amazing how easy it is the second time around, well easier. Have finals next week for my Accounting classes but after that, I hope to knock out book 2 b4 the new yr begins. Strictly reading CFAI this time around…
minor differences seen in 2010 on some new terminology used in Pensions chapter. FSA was also 1 of the 3 sections I passed during a Band 9 failure… the last chapter is quite an interesting one in FSA… (or should I rephrase to say FRA).