Surgent CPA Review provides its students with a uniquely focused and streamlined approach to passing the CPA Exam. We update our online material at least quarterly to ensure that our students receive the most up-to-date information. The Quarter 2, 2016 test window is fast approaching, and to assist you in your studying, we have summarized the Financial Accounting and Reporting standards that will become testable in that window. Some standards have been omitted from the list because the editors believe that the content of the standards is beyond the scope of the CPA exam (i.e., ASU No. 2015-10, 12, 13, and 15). Standards ASU No. 2015-11 and No. 2015-17 are not included below as the first test window for both standards is not until Quarter 1, 2017.

We hope you find this helpful, and wish you good luck on your exam!


ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606)


On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). For public business entities, certain not-for-profit entities, and certain employee benefit plans, the effective date was for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period.

The amendments in this Update defer the effective date of Update 2014-09 for all entities by one year, or December 15, 2017 for the entities listed above. Therefore, this content will not become testable until Quarter 1, 2018.



ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments


Stakeholders had informed the Board that the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination added cost and complexity to financial reporting but did not significantly improve the usefulness of the information for users. The requirement to retrospectively account for those adjustments has therefore been eliminated by the amendments in this Update.

Additionally, an acquirer must:

  • Recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustment amounts are determined.
  • Record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects resulting from the change to the provisional amounts. This effect is required to be calculated as if the accounting had been completed at the acquisition date.

An entity must present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.



GASB No. 77, Tax Abatement Disclosures

Financial statement users need information about certain limitations on a government’s ability to raise resources, including limitations on revenue-raising capacity resulting from various government programs.  Tax abatements are widely used by state and local governments, particularly to encourage economic development, and result from an agreement between a government and an individual or entity in which the government promises to forgo tax revenues and the individual or entity promises to subsequently take a specific action that contributes to economic development or otherwise benefits the government or its citizens.


This Statement requires governments that enter into tax abatement agreements to disclose the following information about the agreements:

  • Brief descriptive information, such as the tax being abated, the authority under which tax abatements are provided, eligibility criteria, the mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of commitments made by tax abatement recipients
  • The gross dollar amount of taxes abated during the period
  • Commitments made by a government, other than to abate taxes, as part of a tax abatement agreement.


Governments should organize those disclosures by major tax abatement program and may disclose information for individual tax abatement agreements within those programs.

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