Did a search and could not find these answers so i am hoping for your assistance. Hopefully this can help others too. ETHICS: 4. Why is C wrong? Is it just because A is a more correct answer because the phrase about the interests of clients is “more incorrect” and is in more need of fixing? FSA: 20/22: What’s this deal with unrealized vs. realized translation gains (not discussed in Schweser)? Is it just best to remember that items at historic rates only get translated if realized (and ignored if unrealized) and items at current rates get translated regardless if realized or unrealized? Basically memorizing b/c I don’t really get the logic of the answers. EQUITY: 42. Statement 2: “Accounting for changes in the value of investments considered to be AFS biases the valuation by incorrectly stating both book value of equity and ROE”. Answer says that this is incorrect because it biases only ROE but not book value of equity. Why not BV of equity? Since AFS goes in equity under OCI isn’t BV of equity biased too?
- I had C here too… When i looked back, there was another place in the paragraph that already addressed that employees should trade in the interest of the employer first, than themselves. then the next sentence is about the clients… this is my best guess here… Need some experts to clean up the other ones
FSA: 20:there would be no translation gain/loss because it is recorded at historical cost, so there is no adjustment to make, therefore no gain/loss occurs. 22:All current method has CTA on equity, Temporal shows CTA on the IS.
tvPM Wrote: ------------------------------------------------------- > FSA: > 20:there would be no translation gain/loss because > it is recorded at historical cost, so there is no > adjustment to make, therefore no gain/loss > occurs. > 22:All current method has CTA on equity, Temporal > shows CTA on the IS. 20: why does the historical cost mean theres no gain or loss? if its at historical cost, you multiply by the historical rate–just like you would if its at avg or current. i am not following you here. 22: i know that all current has CTA but its the fact that they mention these unrealized g/l that is throwing me off. t he answer says “All unrealized translation gains or losses are reported as a cumulative translation adjustment in equity when the all-current method is used.” what is diff betweeen unrealized and realized when it comes to translation? spacubo.
the show NY Wrote: ------------------------------------------------------- > tvPM Wrote: > -------------------------------------------------- > ----- > > FSA: > > 20:there would be no translation gain/loss > because > > it is recorded at historical cost, so there is > no > > adjustment to make, therefore no gain/loss > > occurs. > > 22:All current method has CTA on equity, > Temporal > > shows CTA on the IS. > > > 20: why does the historical cost mean theres no > gain or loss? if its at historical cost, you > multiply by the historical rate–just like you > would if its at avg or current. i am not > following you here. > > 22: i know that all current has CTA but its the > fact that they mention these unrealized g/l that > is throwing me off. t he answer says “All > unrealized translation gains or losses are > reported as a cumulative translation adjustment in > equity when the all-current method is used.” what > is diff betweeen unrealized and realized when it > comes to translation? > > spacubo. 22. There is no difference?
why is the word unrealized in the answer? tvpm said in temporarl method for #20 how its not recording because its at historical cost
20: because there is no change in the value due to currency movements. If it was valued at 100 at purchase, it is carried at 100. When you translate, its 100. so as long as it is unrealized, its still 100, no currency effect, so no CTA. As far as the unrealized/realized issue, I am not sure. I assume realized would be if you sold the asset at whatever the current rate at that time is. 22: unrealized, think of an investment you have. You still hold it, but the value is translated, so there will be a CTA. The fact that you still hold it makes it unrealized I believe. FYI I got one of those wrong, but this is just my understanding now.
- Statement 2: “Accounting for changes in the value of investments considered to be AFS biases the valuation by incorrectly stating both book value of equity and ROE”. I thought this statement was correct too. My logic was Available for sale should mean that unrealised gains or losses are directly reported into equity income, thus clean surplus wouldn’t hold.
yickwong Wrote: ------------------------------------------------------- > 42. Statement 2: “Accounting for changes in the > value of investments considered to be AFS biases > the valuation by incorrectly stating both book > value of equity and ROE”. > > I thought this statement was correct too. My logic > was Available for sale should mean that unrealised > gains or losses are directly reported into equity > income, thus clean surplus wouldn’t hold. Trick question. The clean surplus rule is violated, that’s true. But the statement says that A) ROE is incorrectly stated (true) and B) BV is incorrectly stated (wrong). So the overall statement is wrong. Note BV is correct because it accounts for the unrealized gains of AFS. ROE is incorrect because the numerator, NI, doesn’t account for those gains, while the denominator, E, does.
on the ethic question, both answer A and C seem right to me, but yet, the correct answer is A. It is questions like this that make ethics kind of challenging… =(
Yeah i havent found anyone who can explain q4
q.16 the equity income from investemts that should be reported on ACI’s 2008 income statement is closest to: 30 (from De Soto) why is columbus not on that list??
and where is interest received from debt securities registred??? becasue the last question asks what would be the difference in a-f-s or held to maturity. if you get interest income with debt securities, where does this go??? im doing everything wront, this sucks!
i tried to explain q4… the employer was already addressed the sentence before in the company policy… thats my best guess…