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CPALE — Advanced Financial Accounting & Reporting

CPA board reviewer (AFAR): partnerships, consolidation, and special topics.

Reviewer for Advanced Financial Accounting and Reporting (AFAR) in the CPA Licensure Examination.

1

Partnership Accounting

Covers partnership formation, operations (profit/loss sharing), dissolution, and liquidation (lump-sum and installment).

💡 Exam Hack

In liquidation, pay outside creditors first, then partner loans, then partner capital.

2

Business Combinations & Consolidation

Under PFRS 3 and PFRS 10, a parent consolidates subsidiaries. Goodwill = consideration transferred − fair value of net identifiable assets.

3

Special Topics

Includes foreign currency transactions, franchise/construction accounting, and home-office/branch accounting.

4

Worked Example

Parent buys 100% of a subsidiary for ₱5M; FV of net assets is ₱4.2M.

Goodwill = 5.0M − 4.2M = ₱0.8M
📌 Quick Recap — Master These

Before your exam, make sure you can confidently explain and apply each of the following:

  • Partnership Accounting
  • Business Combinations & Consolidation
  • Special Topics
  • Worked Example

Re-read any section above where you hesitate, then explain it aloud in your own words — if you can teach it simply, you understand it. Focus your final review on the tables, formulas, and the common-mistake warnings, since those are where most points are won or lost.