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Business Analysis and Reporting Overview

The document provides an overview of the Business Analysis and Reporting (BAR) section, detailing its focus on financial and nonfinancial analysis, technical accounting standards, and compliance. It outlines content and skill allocations across three main areas: Business Analysis, Technical Accounting and Reporting, and State and Local Governments, along with key topics and references. The document emphasizes the importance of understanding historical performance, transaction impacts, and adherence to accounting regulations.

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AHMED HANAFY
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12 views6 pages

Business Analysis and Reporting Overview

The document provides an overview of the Business Analysis and Reporting (BAR) section, detailing its focus on financial and nonfinancial analysis, technical accounting standards, and compliance. It outlines content and skill allocations across three main areas: Business Analysis, Technical Accounting and Reporting, and State and Local Governments, along with key topics and references. The document emphasizes the importance of understanding historical performance, transaction impacts, and adherence to accounting regulations.

Uploaded by

AHMED HANAFY
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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All-CPA-CMA: https://www.facebook.

com/groups/1632715387517897

Business Analysis and Reporting (BAR) Overview


The BAR section evaluates the ability to perform financial and
nonfinancial analysis, assess transactions, and apply technical
accounting standards across for-profit, governmental, and employee
benefit plan entities.
Key Focus Areas:
• Historical vs. Budget Comparison: Understanding past
performance to predict future outcomes.
• Transaction Impact Assessment: Evaluating how events and
market conditions affect financial measures.
• Technical Accounting Standards: Compliance with FASB and
SEC regulations.

1. Content Areas and Breakdown


Content Allocation:
• Area I: Business Analysis (40–50%)
• Area II: Technical Accounting and Reporting (35–45%)
• Area III: State and Local Governments (10–20%)
Skill Allocation:
• Analysis (30–40%) – Interpreting financial data, reconciling
balances, comparing alternatives.
• Application (45–55%) – Using accounting concepts to measure
business performance.
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• Remembering & Understanding (10–20%) – Recalling key


standards, terms, and frameworks.

2. Key Topics in Each Area


Area I: Business Analysis (40–50%)
Financial Statement Analysis
• Compare financial statements (current vs. past periods or budgets)
and explain variances using ratio analysis.
• Use data visualization tools to identify discrepancies and explain
business performance.
o Example Ratios: Profitability, liquidity, solvency.
Non-Financial & Non-GAAP Performance Measures
• Apply a balanced scorecard approach (e.g., customer satisfaction,
employee turnover).
• Analyze specific non-financial aspects like free cash flow, adjusted
net income.
Managerial & Cost Accounting
• Calculate and analyze costs (fixed, variable, mixed) and determine
cost drivers.
• Perform price-volume mix analysis to interpret sales results.

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Budgeting, Forecasting, and Projection
• Prepare and analyze budgets, projections, and forecasts using
what-if scenarios.
• Use projection techniques like cost-benefit analysis and breakeven
analysis.

Capital Structure & Financial Valuation Models


• Compare financing strategies and their impact on capital structure,
liquidity, and loan covenants.
• Use financial metrics like NPV (Net Present Value) or IRR
(Internal Rate of Return).
Risk Management
• Apply the COSO Enterprise Risk Management (ERM) framework.
• Compare strategies for managing financial risks (e.g., market,
interest rate, currency risks).
Economic & Market Influences
• Assess the impact of supply/demand, inflation, and economic
factors on business decisions.
• Example: Calculate opportunity cost or the effect of inflation on
expenses.
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Area II: Technical Accounting & Reporting (35–45%)


Indefinite-Lived Intangible Assets (Including Goodwill)
• Recognize and calculate impairment indicators.
• Prepare journal entries for impairment, amortization, and reporting.
Internally Developed Software
• Identify capitalization criteria and calculate amortization.
Revenue Recognition
• Apply the 5-step revenue recognition model.
• Use data analytics to detect discrepancies in revenue recognition.

Stock Compensation
• Prepare journal entries for share-based payment arrangements.
Business Combinations
• Record business combinations, calculate consideration transferred,
and recognize goodwill or bargain purchase gains.
Consolidated Financial Statements
• Recall consolidation concepts (e.g., controlling interests, VIEs).
• Perform foreign currency translation adjustments.

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Leases
• Analyze lease agreements and prepare journal entries.
• Handle sale and leaseback transactions.
Public Company Reporting
• Recall SEC regulations (Regulation S-X and Regulation S-K).
Employee Benefit Plans
• Prepare financial statements for defined benefit and defined
contribution pension plans.

Area III: State & Local Governments (10–20%)


Government-wide Financial Statements
• Prepare statements of net position and activities.
Fund Financial Statements
• Prepare financial statements for governmental, proprietary, and
fiduciary funds.
Reconciliation of Government-Wide Financial Statements
• Prepare reconciliations between fund balances and net position.
Specific Transactions
• Calculate and record net positions, liabilities, and nonexchange
revenue.
• Recognize interfund activities and eliminate them in consolidated
statements.
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3. Skill Allocation in Tasks


Bloom’s Taxonomy Levels:
• Remembering & Understanding: Recalling standards,
definitions, and basic principles.
o Example: Governmental accounting or intangible asset
reporting.
• Application: Using accounting knowledge to solve problems and
prepare reports.
o Example: Applying the 5-step revenue recognition model.
• Analysis: Interpreting results, reconciling, and comparing financial
alternatives.
o Example: Comparing investment options using IRR or NPV.

4. Key References
• FASB Accounting Standards Codification – Authoritative U.S.
GAAP source.
• GASB Codification – Financial reporting for state and local
governments.
• SEC Regulations – Rules under Regulation S-K and Regulation
S-X.
• COSO ERM Framework – Enterprise risk management for
financial and ESG-related risks.

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