Is Intercoporate Investments the hardest?

I half assed my studies last time, so I didn’t get a good view of what was hard, so after going through FI Derivs, Quant, all the usually hard ones first, I thought they were manageable. But holy hell is Intercorporate Investments the worst. Anyone have tips?

Also, perhaps because I attend pension meetings all the time at my job, and routinely look over actuarial reports, but pension accounting really seems pretty simple.

You need to first divided into three sections depending upon the accounting method used. AKA,learn the HTM/HFT method first in full, then learn the equity method in full, then the consolidation etc. Focus on *when* to use each method, and think about how each method affects Income, Goodwill, CF etc.

MissCleo, do yyou work in Pension Administration?

I would have to say swaptions on interest rate swaps! I’m glad to hear that someone else found them less difficult. If you have not already done so, watching the Schweser video classes on Intercorporate Investments really helps, especially on figuring out how to do the Goodwill calculation.

Interest rate swaps made sense to me, since it is just essentially PVing the other side of the contract. And Azzii I work in pension consulting.

Intercorporate Investments was def rough. Just gotta keep pluggin away at it. only way to remember that stuff. I had a tough time on those item sets, but practice makes perfect and squeezed by on exam day.

Misscleo, Pensions is probably more convoluted and hence Azii’s comment - which actually turned out somewhat true. How prescient!

Intercorporate is no walk in the park. Try giving it a good pass-thru now, then re-read the material in April or May. Schweser helps a lot in this area.

I found intercorporate investments the easiest in terms of material in the CFAI book, Schweser, and EOC questions however the hardest when it comes to twisting the question in the mock exam.

Int Investments is tough initially. Once you read through it several times, youll get the hang of it. Really, first you need to figure out what kind of investment it is (seeing how much control/influence the purchasing company has). That tells you which method to use (equity, cosolidation etc). Its alo important to know if the company follows IFRS because some of the methods change depending on whether we are following IFRS or GAAP. Once you figure these things out, its really all aboput memorzing how everything works. Id recommend drawing a flowthrough chart of some sort, with questions. So the first part would be “How much control does the purchasing company have/is there significant influence”? then “what reporting standards are used?” etc so you can visualize how it all flows through. Personally, I found multinational Ops harder (just the ratio parts). Its tough trying to figure out how to convert the statements and how the numerator and denominator of each ratio is affected by the change. In the end i got it down. ITs all about practice

That’s strange I found multinational ops pretty easy. Current Rate Method and Temporal have become my bitch. Also If it’s balance sheet/ balance sheet it stay the same, it made more intuitive sense. Intercorp. seems like pointless memorization.

Agrred if its BS/BS its very easy. When it isnt, it can get confusing and you really need to know how each method is applied. But i guess everyone learns differently. I also found Pensions to be very easy once I learned the formulas, while many others found it to be very hard. Its funny how everyone learns differently

Do you guys think if you were working as accountant already, it will be quicker to get a hang of this ?

maxmeomeo Wrote: ------------------------------------------------------- > Do you guys think if you were working as > accountant already, it will be quicker to get a > hang of this ? yes

Yes, accountants already have the basic training and concepts down. Intercorporate Investments takes you from owning 1 share of a another company to 100% of that company, and everything in between, and what it means for the financial statements. For CPA education, it’s treated as advanced accounting.