You may have heard that there are a few changes happening to the CPA Exam that will be testable by July 2015. While a couple of updates could be tested on the exam as early as July, other important updates won’t go into effect until later in 2015 or possibly as late as Q1 2016.
Please keep in mind that in cases where early adoption of a standard is permitted, it is the AICPA’s policy for that standard to be testable on the exam starting 6 months after the standard’s issue date. Therefore it is vital to know the month in which a revised standard was issued.
In December 2014 and January 2015, the FASB issued updated standards on private company intangibles in a business combination and extraordinary items. Notably, extraordinary items will no longer be included in financial statements prepared according to GAAP, bringing GAAP more into alignment with IFRS in this case. Both these standards are eligible for early adoption, and would normally therefore be eligible to appear on the exam as early as July 2015. However, the AICPA made a statement in May that extraordinary items will not be removed from the FAR Content Specification Outline (CSO) until Q1 2016. In other words, extraordinary items will remain on the exam through the rest of 2015. Beginning in January 2016, it will be gone.
Bond issue costs represent another notable change on the horizon for the CPA Exam, but not until Q1 2016. In April 2015 the FASB issued an updated standard which completely changes the accounting for bond issue costs under GAAP; we wrote about it here and here. Because this accounting standard is eligible for early adoption, it would normally be eligible to appear on the CPA Exam as early as 6 months from the issue date, or in October 2015 at the earliest. Again, however, because the change is significant the AICPA has explicitly stated the change will not become eligible for the exam until Q1 2016.
Two other relatively minor updates to accounting standards which may affect the CPA Exam were issued by the FASB during the year. In May 2015, a standard was issued affecting the fair value measurement of net assets; in 2015, a standard was issued addressing cloud computing fees and expenses from the customer’s perspective. Since both standards were eligible for early adoption, either or both could theoretically start showing up on the CPA Exam in the Q4 testing window, i.e. as early as October 2015. Again, your Roger CPA Review Course will keep you prepared and up-to-date as always.