What makes FSA so hard?

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tsttse

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I have not started on FSA and only finished book 1! (I know I am well behind) But it seems like that the hardest part will be FSA, I am just wondreing why that is so?
I have done one accounting and one finance course in university.
I am hoping my experience wtih accounting covers at least 1/3 of the material such as income statements and balance sheets. Or do I just have a total misunderstanding of what FSA is?
What can I do to FSA easier to undrestand?
 
FSA is weighted heavier. Claiming FSA is hard is subjective. Personally I have not found it as awful as people make it out to be.
I think an externality of these boards is making the exam seem exponentially more difficult that it should be.
 
Accounting at universities, from the courses I’ve seen/had/heard about, is not practical in my view. They cover things that are not related to analyzing a company’s financials in terms of an investment opportunity, but more about managing a company. FSA is the largest portion of L1 test, is much more in depth than university work, and can be difficult just because, as usual, accounting definitions/techniques are overly complicated. I would suggest doing book 1(ethics), and then going to FSA. You will get a feel for where you are at, in terms of your undergrad work, and will be able to allocate your time better. The second best tip I have, take a practice test from CFAI as soon as you can. The way the questions are worded and their difficulty is alot different than most are used to. FSA is almost all fundamental/conceptual and not numerical or calculation intense. You need to know how/why to do something, and be able to understand it in questions with no numbers….purely understanding the concepts.
 
Because FSA has no structure, no logic, and is just a bunch of silly rules.
 
My opinion is that people just have a very difficult time grasping the concept of accounting in general. When I tutored accounting students at a community college, I was hearing some of the same questions repeatedly: what is meant by receivables; what’s a prepaid asset; do you debit or credit expenses; how do I know when to debit or credit an account, and so on.
To understand FSA, you have to have a solid foundation in accounting. You need to know the ins and outs of a balance sheet and income statement.
The ratios will then make sense. The concepts of adjusting financial statements will also make sense.
 
gdiddy Wrote:
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> My opinion is that people just have a very
> difficult time grasping the concept of accounting
> in general.
Right.
I wrote a book called the “Axiomatic Principles of Accounting” reproduced below:
 
Coming from a background in mathematics I found SS9 to be brutal. The rest of FSA was not too bad.
 
There’s a lot of steps to memorize for FSA. For example, calculating cash flow components… or all the damn ratios… or amortizing bonds. I suggest for everyone to write down the important aspects of each chapter, particularly what you find challenging, on sheets of note paper, and fold them up and put them in your wallet. That way you can always read them whether on the bus or on the toilet. Once the different components come together in your head it’ll be easier to see the big picture.
 
Best way to learn FSA and do well is to realize that it is principle based. Also, US GAAP and IFRS for the most part always err on the side of conservatism. If you keep in mind principles such as accrual and matching..etc, accounting / FSA will become second nature. When in doubt on a FSA question, always pick the most conservative treatment, you will be correct 3 out of 4 times. Just my two cents.
 
I, for one, also think that it seems hard because majority of candidates, 60% or more are just not suitable for it. :p
 
JoeyDVivre Wrote:
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> Because FSA has no structure, no logic, and is
> just a bunch of silly rules.
Agreed. In college I remember complaining to my accounting professor that Calculus was much easier than Managerial Accounting because calculus was straight forward and logical. Accounting is judgemental and arcane.
The key is learning to think in terms if the most fundamental accounting prinicples first. Then, much like mathematics, the concepts just build on the fundamentals.
 
Deferred taxes, leases, analysis of liabilities, differences between IFRS and GAAP.
 
FSA is difficult because it’s a new language for most of us with its own vocabulary and rules. However, you are not expected to write poetry in this new language but rather understand how to read and write.
 
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