FAR Mnemonics

Question 1

Ingredients of Relevance = PCM

Answer 1

P- Predictive Value
C- Confirmatory Value
M-Materiality

Question 2

Ingredients of Faithful Representation = NCF

Answer 2

N- Neutral
C- Complete
F- Free from Error

Question 3

Enhancing qualitative characteristics = CUTV

Answer 3

C- Comparability
U- Understandability
T- Timeliness
V- Verifiability

Question 4

Sources of accounting literature = BOSSII

Answer 4

B - Accounting Research Bulletins
O- Accounting Principles board Opinion
S- FASB Statements of Financial Accounting
S- FASB Staff Positions
I- FASB Interpretations
I- FASB Implementation

Question 5

5 elements of Present Value = UVOTE

Answer 5

U-The price of uncertainty
V- Expectations about timing Variations
O-Other factors
T-Time Value of Money
E-Estimate of future cash flow

Question 6

Presentation order of the major components of the Income and RE Statements = IDEA

Answer 6

I-Income or Loss from Continuing Operations (before tax)
——TAX———
D-Income or loss from Discontinued Ops (net of tax)
E-Extraordinary Items (net of tax)
A- Cumulative Effect of change in accounting principle (net of tax reported on SRE)

Question 7

Components of OCI = PUFER

Answer 7

P-Pension adjustments
U-Unrealized gains and losses on AFS securities
F-Foreign currency translation
E-Effective portion of cash flow hedges
R-Revaluation of surplus (IFRS only)

Question 8

Lessee Capital Lease 4 Criteria = TT BPO 75 or 90

Answer 8

TT-Title Transfers
BPO-Bargain Purchase Option
75- 75% or more of the assets economic life is being committed in the lease term
90- PV of minimum lease payments is 90% or greater of the FV

Question 9

3 conditions for the lessor to classify as lease as a sales type or direct financing lease (all 3 must be met) = LUC

Answer 9

L-Lessee “owns” the leased property (TT, BPO, 75, 90)
U- Uncertainties do not exist regarding any un-reimbusable costs to be incurred by the lessor
C- Collectability of the lease payments is reasonably predictable

Question 10

Consolidation adjustments made by acquirer = CAR IN BIG

Answer 10

CAR - Common Stock, APIC, Retained Earnings are ELIMINATED (dr.)
I - Investment in Sub is ELIMINATED (cr.)
N - Non Controlling interest is CREATED (cr.)
B - Balance Sheet of Sub is Adjusted to FV and recorded
I - Identifiable intangible assets of sub are adjusted to FV and recorded
G - Goodwill or gain is recorded

Question 11

Parents retained earnings in the year of consolidations = BASE

Answer 11

B-Beginning RE
A-Add consolidated NI
S-Subtract PARENTS Divs for entire period
E-Ending RE

Question 12

Plan Assets = BASE

Answer 12

B- Beginning FV of plan assets
A- +Contributions
S- +Squeeze "the actual return on the plan assets"
(- the benefit payments)
E- Ending FV of plan assets

Question 13

Components of pension expense = SIRAG

Answer 13

S - Service Cost
I - + Interest Cost
R - (Return on plan assets)
A - + Amortization of PSC
G - +/- (Gains) and Losses

Question 14

Loss contingency disclosures = DOG

Answer 14

D - Debts of other guaranteed
O - Obligations of commercial banks under standby letters of credit
G - Guarantees to repurchase receivables that have been sold or assigned

Question 15

CAFR Funds = DRIP CEG PIPPA

Answer 15

Consonants are Gov Funds
Vowels are Proprietary
PIPPA are Fiduciary Trusts

D-Debt Service
R-Special Revenue
I-Internal Service
P-Permanent

C-Capital Projects
E-Enterprise
G-General Fund

P-Pension Trust
I-Investment Trust
PP - Private PurpoA¿¿¿¿¿¿¿‚—ACKLXC se Trust
A- Agency Trust

Question 16

Foreign Currency Financial Statements: LIFER ROT

Answer 16

Local Currency Functional Currency Reporting Currency

Re-measurement, Translation