Though major changes to the CPA Exam officially went into effect on April 1, 2017, the content of the exam will continue to change over time as new pronouncements become testable. Knowing when the specifics of these pronouncements will appear on the CPA Exam can help you determine the order in which you should take the CPA Exam sections. Therefore, we want to let you know when one new pronouncement in particular will be tested on the CPA Exam, which section the pronouncement will affect, and when you should schedule that section based on this information.
In 2014, the International Accounting Standards Board (IASB) issued IFRS 15, and the Financial Accounting Standards Board (FASB) issued ASU 2014-09 (ASC 606 “Revenue from Contracts with Customers”). In an effort to resolve implementation issues discovered by their Joint Transition Resource Group, the effective date of these standards was delayed until January 1, 2018, with early adoption permitted.
The new revenue recognition standards state accounting requirements for all revenue generated from contracts with customers. “Revenue from Contracts with Customers Topic 606 (IFRS 15)” provides a single, principles-based revenue recognition model that can be applied to all contracts with customers regardless of whether the accounting issues are industry-specific (e.g., real estate of software) or transaction-specific.
CPA Exam Section Affected
The AICPA has determined that the new revenue recognition standards will appear on the FAR CPA Exam section on January 1, 2018.
To respond properly to the implementation of this new revenue recognition standard into the FAR CPA Exam section, CPA review providers should make a number of changes to courses that address FAR. Candidates taking FAR in 2018 should also prepare with courses that include these changes, as after January 1, 2018, preparing for FAR with exam prep that does not reflect the new revenue recognition standards could jeopardize your chance of receiving a CPA passing score. Gleim CPA will update our CPA exam prep to discuss the new revenue recognition standards on December 11, 2017. Our refreshed content will feature ample explanations and illustrative examples that make the new standards easy to understand and will completely prepare exam candidates for FAR in 2018.
CPA Exam Scheduling Strategy
Since the new revenue recognition standards won’t be tested on the CPA Exam until January 2018, candidates who are familiar with the current revenue recognition standards (IAS 18 and FASB Accounting Standards Codification Topic 605) should prepare to pass FAR in 2017. If you’ve been on the fence about taking FAR this year, or if you’re scheduled for Q4 but are considering postponing, you may want to buckle down and get it over with after all! If you’re not planning to study for the CPA Exam until late 2017, you can safely leave FAR until 2018.
FAR CPA Review
Whether you take FAR before or after the new revenue recognition rules becomes testable in 2018, you don’t need to worry about the revenue recognition standards or any other FAR content when you study with Gleim CPA Review. Our study materials are always updated to reflect the latest content for every CPA Exam section, so all you have to do is stick to your study schedule and trust Gleim to prepare you. Discover how effective our new course is by accessing our free CPA demo today!