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CPA BAR notes · Business Analysis and Reporting

Deeper FAR topics, managerial accounting, data analysis and government accounting. The exam is 4 hours with 50 multiple choice questions and 7 task-based simulations.

Blueprint areas

Chapters

  1. Financial statement analysis. Data needed for analysis; comparing to prior periods and budget; interpreting ratios; using data analytic outputs; effect of transactions on the statements
  2. Non-financial and non-GAAP measures. Benchmarking; the balanced scorecard; customer and employee measures; EBITDA, free cash flow and adjusted earnings
  3. Cost accounting. Fixed, variable and mixed costs; absorption, variable, activity-based, process and job order costing
  4. Variance analysis and sales analysis. Choosing the right variance; cost variances; sales price, volume and mix
  5. Budgeting, forecasting and projection. Transforming data; preparing budgets; forecasting techniques; cost-benefit, sensitivity, what-if and breakeven analysis; predictive analytics
  6. Capital structure. Cost of capital; leverage, liquidity and covenants; comparing financing strategies
  7. Investment decisions. Present value and NPV; option pricing inputs; payback, IRR and economic value added; make, lease or buy
  8. Risk management. COSO ERM and its use for ESG risks; mitigating market, interest rate, currency and liquidity risk; working capital strategy; SWOT
  9. Economic and market influences. Supply, demand and elasticity; inflation; measuring interest rate, currency and price risk; opportunity cost; acquisitions and divestitures
  10. Goodwill and indefinite-lived intangibles. Impairment indicators; carrying amount; impairment entries
  11. Internally developed software. Internal-use software stages; software to be sold; capitalization and amortization
  12. Revenue recognition: reading contracts. Applying the five steps to contracts and documents; finding and fixing revenue discrepancies in data
  13. Stock compensation. Grant date, vesting and valuation inputs; equity-classified and liability-classified awards
  14. Research and development costs. What counts as R&D; expensing
  15. Business combinations. Business versus asset purchase; consideration transferred; contingent consideration; goodwill or bargain purchase gain; noncontrolling interest
  16. Consolidation topics. Controlling and noncontrolling interests; variable interest entities; functional currency; translation adjustments and their presentation
  17. Derivatives and hedge accounting. Freestanding and embedded derivatives; hedge criteria; presentation of gains and losses; interest rate swap entries
  18. Leases: lessor accounting and special cases. Lessor classification; lease receivable and income; sale and leaseback; analysing a lease agreement for the lessee
  19. Public company reporting. Regulation S-X and S-K; XBRL; reportable segments and their disclosures
  20. Employee benefit plan financial statements. Required statements and notes for defined benefit and defined contribution plans; net assets available for benefits
  21. Government financial statements. Government-wide, governmental fund, proprietary fund and fiduciary fund statements
  22. Other parts of the ACFR. Notes; MD&A; budgetary comparison; other RSI; the reporting entity and component units
  23. Deriving the government-wide statements. Conversion worksheets; reconciling fund balances to net position
  24. Net position and fund balances. Net investment in capital assets, restricted and unrestricted; nonspendable, restricted, committed, assigned and unassigned
  25. Capital assets and long-term liabilities. Capital and infrastructure assets; general long-term debt; net pension and OPEB liabilities
  26. Interfund activity, nonexchange revenue and expenditures. Transfers and eliminations; property taxes and grants under each basis; expenditures versus expenses
  27. Budgetary accounting and encumbrances. Types of budgets; recording the budget; recording encumbrances