 Hello, everyone. In this session, I'm going to be looking at the CPA exam changes that's going to be taking place in 2024. Specifically, I'm going to look at the old FAR and tell you what's going to happen to the new in quote FAR. So what's happening to the FAR to the new FAR. What I did is I used the blueprint, the recent blueprint. And I looked at the new blueprint for the CPA evaluation 2024, which is this is the accounting core or just simply put the core for the accounting. And this is the bar section, which is in quote, the advanced accounting. So let's go ahead and take a look at the overview. What you can notice is this, the old FAR has four sections, one, two, three, four, the new core accounting has three sections. What happened is this real quick, the state and local government is gone. It's no longer under the core. Now you're going to see we're going to still have some few governmental concept, which I'm going to talk about in details later on. But this is gone. Also, what's gone is notice here, it says conceptual framework standard setting and financial reporting. What's left is financial reporting. And frankly, those two are deleted. They are simply gone, gone, gone. Okay. Also, we have selected financial statements and selected transactions. Now we have selected balance sheet account. Notice it's specifically balance sheet and selected transaction. Let's go ahead and dive into the details of what's happening. Before we proceed any further, I have a public announcement about my company, farhatlectures.com. Farhat accounting lectures is a supplemental educational tool that's going to help you with your CPA exam preparation as well as your accounting courses. My CPA material is aligned with your CPA review course such as Becker, Roger, Wiley, Gleam, Miles. My accounting courses are aligned with your accounting courses broken down by chapter and topics. My resources consist of lectures, multiple choice questions, true false questions, as well as exercises. Go ahead, start your free trial today. No obligation, no credit card required. Starting with the area one, area one, right here, area one financial reporting. It used to be 20 to 35, now between 30 to 40%. And it's only called financial reporting. The major changes I just told you, conceptual framework and standard studying, those are gone. They're no longer tested. What remained the same is section A of area one, which is the general purpose financial reporting for business purpose. Simply put, your balance sheet, your income statement, comprehensive income statement of changes in equity, statement of cash flow, minor stuff about consolidated financial statements and notes. Now, the testing level might switch a little bit. For example, some of it was remembering, now it's application. Some of it was application, now analysis or vice versa. But the topics are the same. I would say it doesn't matter what the testing level is, you have to know it, you have to know it. So nothing really changed in area one. Same concept in area B remained the same. And this is what I hated about this changes in the blueprint. They kept some non-governmental, not-for-profit entities, the general purpose financial reporting. So you still have to know for governmental accounting, the statement of financial positions, statement of activities, statement of cash flows and notes to the financial statements. So the overall picture for non-governmental, not-for-profit entities, I wish they moved this to bar. Also, they added to this section, which is I also, I hate this, section C, which is some light governmental accounting concept, because I told you the governmental accounting, the main section, section 4 is moved, but they kept state and local government concept, which is basic concept, measurement, focus and basis of accounting. Basically, they want you to know what's modified, the cruel and the purpose of funds, which is again, why would you have the purpose of funds here and cover the funds in bar? I guess that's what they wanted it. I hope they will change this down the road and just keep governmental in bar. Now, let's look at area 1 and other changes. Section D, they used to have a public company reporting topics, SEC and other topics. They trimmed it down and they moved some of the topic to bar. Not a big deal at all. The old E used to be financial statement employee benefit plan. Well, this section is moved to bar. It's no longer here. Now they have a new E section called the special purpose framework, which is not really new. It used to be section F. And now they added a new material in section F, which is not a big deal at all. The financial statement ratio simply put, they want you to know the ratios in the core. And that's basically the financial reporting topic. Nothing really major. If anything, they trimmed it down. They took out the conceptual framework and the standard setting, which used to be a lot of memory, and they added some minor topics about governmental accounting, which is you would, you would have studied in far anyway. Nothing major. Let's take a look at the selected balance sheet. Now it's called selected balance sheet, specifically not selected accounts, selected balance sheet. So they want to focus on the balance sheet. This section used to be 30 to 40%. Used to be 30 to 40, still 30 to 40%. And the topics remain the same. Simply put, balance sheet accounts, cash, receivable inventory, property, plant and equipment, investment. Here are, they are in front of you. Now some shifting of the material, they moved from this topic. They used to have J, K and L. They moved J, which is revenue, revenue, it means income statement. Since this is a balance sheet, they removed it to select the transaction and they remove some of it to bar. That's fine. Stock compensation, they moved it to bar. Income taxes, they moved to the core. They moved it to the core and they moved to area three. So they moved some of it to the selected transaction. I'm sorry, income taxes, they moved it within core. That's it. They just moved it from balance sheet and they moved it into the core, which you'll see on the next slide. So that's what happened. So what happened to section two? They reduced it. They reduced some of the topics from section two. Section two is not only balance sheet. It used to be balance sheet. It used to be accounts in general and transaction. Now we have transactions separately. Used to be selected financial accounts. Now it's called selected transaction. And section A remained the same accounting changes and corrections of error. This is a major one. Section B. Section B used to be business combination. Now it's moved to bar. This is a major one. We have a new section B called contingencies and commitment. The old C was contingency and commitment. Now they replaced it with revenue recognition, which is revenue recognition moved from area two to area three. So this used to be an area two. Now they moved it to area three. And it's also covered in bar on a more advanced level. Old D was derivatives and hedge accounting. Now new D is accounting for income taxes. Remember, also they moved accounting from income taxes from section two to section three. Old E used to be foreign currency transaction and translation. Now the new E is fair value measurement used to be the old K. Again, some shifting around. F leases remain in the core. And we have leases within bar. So leases will be covered both in the core under section F and in bar. All the G used to be now reciprocal transfer, which is governmental, that's moved to bar. And now we have a new G called subsequent should be one word subsequent event used to be J. What did they move from this section? They move research and development costs, move to bar and software costs move to bar as well. Those are moved from the from the core, not from the core from the old far to the bar. They're not in the core anymore. And goodwill is there. That's why I said where is goodwill goodwill is in the in the core as I'm sorry, not in the core in the bar. Section four is easy. Section four is gone. We no long, we no longer have section four, which is the governmental. Remember, I told you at the beginning, the governmental is gone. Now let's talk about bar, which is now we're going to talk about bar, which is the advanced, the advanced topic for for far. Okay, starting with we have three section business analysis, technical accounting and reporting and state and local government starting with the state and local government. Simply put the old section four and far now it's section three in bar. Okay, nothing, basically the same topics, basically the same topics governmental accounting. Let's talk about section one, which is this is new, new in quote, not really new material, it's just new topic. So they have section a under section a at current period historical analysis, including the use of data. So what is that? What topics are covering? Well, they're covering ratios. Didn't we look at ratios? Yes, here, they want you to explain and analyze financial statement analysis numbers, which is using ratios, really a new topic here is called non financial and gap measure of performance. This is totally new topic. That's not a big deal at all. So you don't have to worry about this section three under a managerial and cost accounting, which is the old BEC. So notice the old BEC now it's part of bar, some of it, managerial and cost. Then they have section B, which is prospective analysis, including the use of data. Yeah, big words. What are what is this budgeting forecasting and projection old BEC? Well, forecasting and projection is like kind of kind of new kind of they kind of they they touched upon it. Maybe it's going to be a little bit more in advance, maybe some regression, some estimate, but nothing major capital structure old BEC investment alternative use and financial valuation model, the old BEC capital budgeting and similar topic, risk management, old BEC COSO and some other topics, five economic and market influences on business, old BEC the econ but trimmed down a little. So this is basically the business analysis, which is the new some of the made mainly old BEC. So notice the BEC is not really gone, some of it is integrated into far. Let's take a look at the technical accounting and reporting. Here technical, what they mean is a little bit more advanced. And this is section two of bar indefinite, intangible, including goodwill used to be covered in far now it's covered here. Internally developed software and it's a new topic, but it's fairly easy topic. Revenue recognition. Remember revenue recognition was shifted from section two to section three and core. Now some of it is also in bar at the more advanced level stock compensation remember I told you it moved from far to bar so it didn't eat it didn't make it to the core research and development move from far to bar business combination a big one moved from far to bar consolidated financial statements same concept derivatives and hedge accounting used to be basic basic old and for it's still basic they're going to test it at a basic level and bar leases covered in the core and covered in at a more advanced level and bar public company reporting topics it used to be old far again it's not a major topic it's a broken down as well between the core and far and financial statement of employee benefit same as before it used to be in far they just they moved it to the bar. I would I would not say nothing is major here nothing absolutely no new material minor new material otherwise shifting of material that's about it now again we talked about section three so in summary let me give you just summary like what's happening here some topics were deleted the conceptual framework and standard setting those are gone shifting of material is happening yes mainly governmental accounting and business combination as well as others you saw some shifting but the governmental is the main one the governmental and the advanced accounting and what they did they added to the bar some BEC topic managerial cost and econ now what is my overall impression I'm gonna use some words I don't like I don't really like to use but I think the core accounting is getting easier in my opinion the core accounting is getting easier so if you don't like consolidation you don't like governmental accounting you you want to avoid the you want to avoid the bar that's what's that's what's mainly in bar more advanced topic but guess what if you work with these topics like if that's your specialty you are a staff and you work in consolidated financial statement or you are working in governmental accounting you want to take this specialty otherwise overall the accounting core concept is getting lighter that's what that's what that's what I mean be that's what I mean by easier so this is again let me look at the overall picture this is the core I believe the core is getting lighter the core accounting is lighter now here it's mainly mainly again governmental and finance advanced topics that you learned in the core and say governmental and consolidation governmental and some advanced topic that's what the bar is all about plus plus the business analysis which is the old BEC which is I believe they are basic topics I mean the fact that 50 percent of it is business analysis it makes it easy to I mean managerial cost accounting and econ they should for me I mean I don't I hate the word I hate to use the word easy or hard I'm not gonna say they are easy but they are as not specific or they don't have specific rules as revenue recognition which is it's I believe it's more challenging in my opinion but 50 percent is business analysis so it should be fairly easy technical accounting and reporting if you have some basic knowledge you should be able to survive so overall no earth shattering I did not see like big data or it or anything integrated here so again what should you do think about your options my goal is to give you as much information as possible about what's happening you make your own decision please comment comment in the comment in the comment section what you think maybe I have missed something again what I did is I use the old blueprint and the new blueprint and compare them you know if I made a mistake please let me know as always if you're not a member of farhat lectures take a look at farhat lectures and good luck study hard stay safe I'm always here for you