THE 2019 CPA EXAM

A Guide for the Exam Updates

TABLE OF CONTENTS

3 Introduction

4 REG Content Updates

8 FAR Content Updates

11 How We’re Preparing Students with

SmartPath Predictive Technology™

13 Conclusion
Introduction
If there’s one piece of advice we continue
to provide to aspiring CPAs, it’s to start
studying and sit for the CPA Exam as
soon as possible. Whether you’re just
graduating or already working in the
accounting field, passing the CPA Exam
will greatly benefit your career. For CPA
candidates who hold off, life only gets
increasingly busier and their chances of
passing the first time around begin to
decrease.
In addition, the CPA Exam is always
changing to reflect new laws and adapt to
new business practices.
Case in point: The 2019 CPA Exam. In this
eBook, we’ll guide you through the major
updates to the new exam launching on
January 1, 2019, and what it will mean for
your test-taking experience both as a
candidate who’s ready to sit now or in
the future.
Here is a quick, high-level rundown of
what’s expected on the 2019 version of
the CPA Exam and how we’re helping you
successfully prepare to pass no matter
when you sit.
Regulation (REG) Content Updates
The Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act was signed by
President Trump and became public law
on December 22, 2017. The tax overhaul
is the first of its kind in over three
decades and has significantly
reformed both individual and corporate
income taxes. Most of the cuts are
effective starting in 2018; the individual
tax cuts generally expire in 2025 while
the business tax cuts will remain
permanent. This massive change to the
tax code means CPAs must prepare to
determine the effects on their clients’
finances and reassess their tax planning
strategies accordingly.
According to the Balance Website:
“[The tax plan] cuts the corporate tax
rate from 35% to 21% beginning in 2018.
The top individual tax rate will drop to
37%. It cuts income tax rates, doubles
the standard deduction, and eliminates
personal exemptions.”
Regulation (REG) Content Updates
How does the new tax plan impact the CPA Exam?
Although it is highly unlikely that the
AICPA will make big changes to content
allocations or representative tasks on the
Regulation Blueprint, the tax portion of
the Regulation Exam will undergo
comprehensive content changes to align
with the new tax plan.
The following REG Content Allocation
table in the AICPA blueprints summarizes
the content areas and the allocation of
content currently tested on the Exam.
Content areas that will be most affected
by the tax plan will be Areas III, IV, and V.

Content Area Allocation

Ethics, Professional
Area I Responsibilities, and 10–20%
Federal Tax Procedures

Area II Business Law 10–20%

Federal Taxation of Property

Area III 12–22%
Transactions
Federal Taxation of
Area IV 15–25%
Individuals

Area V Federal Taxation of Entities 28–38%

Regulation (REG) Content Updates
How is the Tax Cuts and Jobs Act going to be tested on the CPA Exam?
The TCJA will be eligible to be tested on
the CPA Exam beginning January 1, 2019.
According to the AICPA:
“The Exam will continue to test
candidates on the tax laws and
regulations in effect before the
enactment of the Tax Cuts and Jobs Act
through the 2018 Q4 test window ending
on December 10, 2018. The Exam’s
Authoritative Literature will continue to
include (through December 10, 2018) the
Internal Revenue Code as published
before the enactment of the Tax Cuts
and Jobs Act. In accordance with existing
policy, there will be a simultaneous
introduction of content related to the Tax
Cuts and Jobs Act and removal of content
related to the previous tax law.
No provisions of the Tax Cuts and Jobs
Act, including those retroactive to
periods before December 31, 2017, will
be eligible for testing until January 1,
2019.”
Regulation (REG) Content Updates
Sit for REG now if you can & obtain licensure sooner
In order to avoid having to relearn
everything you learned in your tax
classes up to this point, we highly
recommend sitting for REG now. The last
day of the last testing window is
December 10, 2018 — which means you
still have plenty of time to study and sit
for REG before the changes go into
effect.
In addition, getting a jump start on the
CPA Exam will help you obtain licensure
sooner. Individuals and corporations will
be needing the help of CPAs more than
ever to ensure tax compliance on tax
returns and to make sense of the new
policies. Not to mention the fact that
accounting firms will be increasing staff
to accommodate the aforementioned
growing client base.
Financial Accounting & Reporting (FAR) Content Updates
FASB’s issuance of ASC 842
In 2016, the FASB issued ASC 842,
updating the accounting treatment of
leases. The goal of the update was to
provide more transparency and
comparability among companies
regarding lease assets and liabilities. To
help ease the transition, the Board has
allowed entities time to adopt the new
leases standard.
As we get closer to Q4 2018,
the adoption date of January 1, 2019 for
calendar year-end public entities is
quickly approaching.
Not only must these companies adopt
the standard, but they also must
recognize the cumulative-effect
adjustment on the balance sheet.
But companies aren’t the only ones
affected by this change. If you’re
preparing to take the FAR section of the
CPA Exam, then these changes affect you
as well. Keep reading for some highlights
of the updated standard.
Financial Accounting & Reporting (FAR) Content Updates

Updated Standards include…

Balance Sheet Recognition

• Operating leases over 12 months will now be reported on the balance sheet.
• The new standard creates transparency for investors regarding a company’s
financial leverage and earnings.

Financial Statement Disclosures

• ASC 842 has more stringent requirements for quantitative and qualitative
financial statement disclosures.
• The increased requirements may require companies to improve or implement
new systems, procedures, and controls to provide the required disclosures.

Lease Qualification
• Long-term leases are now reported on the balance sheet.
• Short-term leases (terms of 12 months or less) are still allowed to be excluded
from the balance sheet.
• The new standard dictates that if the lessee does not have the right to control the
use of the asset, then the transaction may not qualify as a lease.
Financial Accounting & Reporting (FAR) Content Updates

Lease Payments
• Revised definition of indirect costs resulting in fewer allowed capitalized costs.
• Executory costs, like property taxes or insurance, will now be included in lease
payments.

Sale-Leaseback Transactions
• To qualify as a sale, the transfer of the asset must adhere to the revenue
recognition requirements in ASC 606 (Revenue from Contracts with Customers).
• When the transaction does not qualify as a sale, it is classified as a financing
transaction.
• New guidance regarding when the lessee controls the asset before the lease
starts results in fewer built-to-suit arrangements that qualify as a sale-leaseback.

Sit for FAR now

Similar to REG, we highly recommend studying and sitting for the FAR section of the
CPA Exam now — before the changes go into effect on January 1, 2019.
SmartPath™: How We’ll Help You Pass REG & FAR
Now that you know what the 2019 CPA
Exam updates entail, you can see why it’s
imperative that we recommend passing
both REG and FAR this year in 2018.
While this can seem intimidating,
especially if you’re a working
professional, still in school, or both —
have no fear. That’s where we come in.
Our patent pending SmartPath
Predictive Technology™ is a data-driven
platform that provides you with targeted
recommendations on where and how to
focus your efforts by comparing your
progress and performance to those that
have passed the CPA Exam. It exposes
the data of successful CPA Exam
candidates so that you can easily and
quickly gauge your preparedness for
Exam day, evaluating WHICH and HOW
many questions you need to pass.
The ultimate result is more efficient
study sessions and less wasted time.
SmartPath adapts to your individual
progress based on your individual
strengths and weaknesses, taking the
guesswork out of CPA Exam preparation.
Learn more about how SmartPath works
or sign up for a free trial to see how
SmartPath can help you pass the CPA
Exam faster than ever before. We’re so
confident you’ll pass, we stand behind
our program with a full money-back
guarantee.
Not ready to sit in 2018? No problem.
However, if you’re not ready to sit for Therefore, no matter when you take the
REG, FAR, or both this year, don’t sweat CPA Exam, be it now or later, we've got
it. As a Roger CPA Review student, your you covered. And we’ll continue to guide
study materials will automatically update you on the smart path to CPA Exam
to reflect all of the new changes when success.
you're ready to study for REG & FAR in
2019. With a 91% pass rate, learn more about
why our course is the top choice among
Our content team works vigorously Elijah Watt Sells Award Winners and top
combing through our entire course to firms and universities.
ensure that the following content areas
are updated in order to reflect the
current CPA Exam:
• Video lectures
• Textbooks (physical versions and the
eTextbook versions)
• Practice questions
It’s important to remember that the CPA
Exam’s job is to reflect the expectations
of a newly licensed CPA, which is
influenced by continuously evolving
technology that affects the accounting
profession. In other words, candidates
should expect the CPA Exam to always be
evolving to meet industry expectations.
No matter what the changes are,
remember you have a partner in all of
this. The Roger CPA Review team is
dedicated to ensuring you are setup for
success when facing any Exam changes,
and will continue to provide you with any
and all CPA Exam-related news and
updates.
When are the 2019 CPA Exam changes going into effect?
January 1, 2019.

What order should I take the CPA Exam in?

The REG and FAR sections of the CPA Exam are undergoing BIG changes beginning
January 1, 2019. Therefore, we highly recommend candidates sit for the REG and
FAR sections now in order to avoid those monumental changes. Afterward, we
recommend taking AUD and then BEC.

However, if you’re sitting for the CPA Exam in 2019, here’s our recommended
sequence: FAR, REG, AUD, BEC. Want to know the psychology behind this
recommended order? Download our Guide on how to approach the CPA Exam for
more information.

When is the final date to take the 2018 CPA Exam?

The final testing window for the 2018 CPA Exam year is December. The final testing
date is December 10th, 2018.

Will score release timelines be impacted for the 2019 CPA Exam?
There will be no score holds for Q1 2019.

Where can I find out what exactly will be tested on the CPA Exam?
To see what the framework of the CPA Exam is and what the overall tested topics are,
please refer to the CPA Exam Blueprints provided by the AICPA. It is the backbone of
the CPA Exam that we follow closely to ensure that candidates are properly prepared
for Exam Day.

What happens if I sit for the CPA Exam now and don’t finish until 2019?
If you’ll be taking both the current and new CPA Exam, we’ve got your back. Your
course materials will have all the current 2018 CPA Exam study materials until the
last day of the last testing window, which is December 10, 2018. On December 11,
2018, your course will automatically update to reflect the 2019 CPA Exam.