The CPA FAR Volume 1 Textbook has been updated with some additional changes, mostly related to the latest guidance for ASC 606 (Revenue Recognition). The significant changes are listed below and the new files are available for current students to download in My Studies.
Candidates should review the changed material in the updated book. If you have any questions about these changes, please contact us and we will be glad to assist you.
You can also learn more about the HOCK CPA and other exam prep materials if you are not already a HOCK student.
All Changes Are In Area II
Group B: Trade Receivables
- Header, “Sales Returns,” changed to “Sales Returns and Allowances” and expanded to conform to guidance in the new revenue recognition standard, ASC 606.
Group C: Inventory
- Header, “Recognizing Permanent Declines through the Lower of Cost or Market” changed to “Recognizing Permanent Declines in Inventory Values” and updated for the change in accounting standards requiring valuation of inventory at the lower of cost or NRV for inventory methods other than LIFO or the Retail Method.
Group E: Investments
- The topic has been reorganized for improved clarity.
- A new topic, “Accounting for the Transfer of Debt Securities Between Classifications,” has been added.
- A new topic, “The Fair Value Option for Investments in Debt Securities,” has been added.
- The information in the topic “Changing from the Fair Value or Cost Method to the Equity Method” has been updated for the change in accounting standards in ASU 2016-07.
- A new topic, “The Fair Value Option to Account for Equity Investments Where the Investor Has Significant Influence,” has been added.
Group G: Payables and Accrued Liabilities
- The topic “Unearned Revenue” has been changed to “Contract Liabilities” and the information in the topic has been revised to conform to the new revenue recognition standard in ASC 606.
- The topic “Income Taxes Payable” has been updated to reflect the revised accounting standard that all deferred tax assets and liabilities are non-current assets and liabilities.
- The topic “Warranties” has been updated to conform to the revised guidance in the new revenue recognition standard, ASC 606.
- The topic “Premiums and Coupons” (now retitled “Coupons and Premiums” to agree with the order in which those two topics are now discussed) has also been revised to conform to the revised guidance in the new revenue recognition standard, ASC 606.
Group H: Long-Term Debt
- The topics “Changes in Fair Value Due to Changes in Market Interest Rates Reported in Net Income” and “Changes in Fair Value Due to Changes in the Creditworthiness of the Issuer Reported in OCI” have been added to incorporate changes in accounting standards.
- The topic, “The Fair Value Option for Bonds Payable” was added.
Group I: Equity
- The information in the topic “Authorized Shares” on how the number of authorized shares can be changed has been revised significantly and a misstatement corrected.
Group J: Revenue Recognition
- The whole topic of Revenue Recognition has been revised to conform to the changes in ASC 606.
Earnings Per Share
- Information about additional required disclosures has been added to “EPS Disclosures.”
The Statement of Cash Flows
- New accounting standards have made some additions to the specific items included in cash flows from operating activities, investing activities, and financing activities, and those additions have been made to this discussion.
- New accounting standards have included restricted cash and restricted cash equivalents (along with cash and cash equivalents) as part of the definition of “cash” for purposes of reporting activities on the statement of cash flows, and that information has been added.