FAR Formula Sheet & Cheat Sheet

Basic EPS = (Net Income − Preferred Dividends) / Weighted Average Common Shares Outstanding

Diluted EPS = (Net Income − Preferred Dividends + Convertible Preferred Dividends + Convertible Bond Interest × (1 − Tax Rate)) / (WACSO + Dilutive Shares)

Treasury Stock Method (stock options): Net New Shares = Options Exercised − (Options × Exercise Price / Market Price)

COGS = Beginning Inventory + Purchases − Ending Inventory

FIFO = oldest costs → COGS, newest costs → ending inventory

LIFO = newest costs → COGS, oldest costs → ending inventory

Weighted Average = Total Cost of Goods Available / Total Units Available

Lower of Cost or NRV (GAAP): Compare carrying amount to Net Realizable Value

LIFO Reserve = FIFO Inventory − LIFO Inventory

Dollar-Value LIFO: Ending at base × price index layers

Gross Profit Method: Estimated EI = Goods Available − Estimated COGS

Straight-Line = (Cost − Salvage) / Useful Life

Double-Declining Balance = (2 / Useful Life) × Book Value (ignore salvage until BV approaches salvage)

Sum-of-Years'-Digits = (Remaining Life / SYD) × (Cost − Salvage), where SYD = n(n+1)/2

Units of Production = ((Cost − Salvage) / Total Units) × Units Produced

Bond Issue Price = PV of Face Value + PV of Interest Annuity (use market rate)

Effective Interest Method: Interest Expense = Carrying Amount × Market Rate; Amortization = Interest Expense − Cash Paid

Premium: Stated Rate > Market Rate → issued above par

Discount: Stated Rate < Market Rate → issued below par

Right-of-Use Asset = Lease Liability + Prepaid Rent + Initial Direct Costs − Lease Incentives

Lease Liability = PV of remaining lease payments (using incremental borrowing rate or implicit rate if known)

Operating Lease: Single straight-line expense = Total lease cost / Lease term

Finance Lease: Front-loaded expense (amortization + interest, both decline over time)

Pension Expense = Service Cost + Interest Cost − Expected Return on Plan Assets + Amortization of Prior Service Cost + Amortization of Net Loss (or − Net Gain)

Funded Status = Fair Value of Plan Assets − PBO (if PBO > Assets → net liability)

Corridor Rule: Amortize excess of net gain/loss over 10% of greater of PBO or plan assets, over average remaining service period

5-Step Model: (1) Identify contract, (2) Identify performance obligations, (3) Determine transaction price, (4) Allocate to POs, (5) Recognize when/as satisfied

SSP Allocation: Revenue per PO = (PO's SSP / Total SSP) × Transaction Price

Cost-to-Cost: % Complete = Costs Incurred / Total Estimated Costs; Revenue = % Complete × Total Revenue

Contract Asset = Revenue recognized > billings; Contract Liability = Billings > revenue recognized

DTA = Deductible Temporary Differences × Tax Rate (future benefit)

DTL = Taxable Temporary Differences × Tax Rate (future liability)

Tax Expense = Current Tax Payable ± Change in DTL ± Change in DTA

Fund Types:
Governmental (GRaSPP): General, Special Revenue, Capital Projects, Debt Service, Permanent
Proprietary: Enterprise, Internal Service
Fiduciary: Custodial, Pension Trust, Investment Trust, Private-Purpose Trust

Modified Accrual (governmental funds): Revenue when MEASURABLE and AVAILABLE (within 60 days). Expenditures when liability is incurred.

Full Accrual (government-wide, proprietary, fiduciary): Same as commercial GAAP.

Budgetary entries: Debit Estimated Revenues, Credit Appropriations, difference to Budgetary Fund Balance.

Net Asset Classes: Without Donor Restrictions, With Donor Restrictions

Contributions: Recognized at fair value when unconditional promise is made.

Release from Restrictions: Reclassify from "with" to "without" when purpose/time restriction is met.

Goodwill = Purchase Price − Fair Value of Net Identifiable Assets

NCI (noncontrolling interest) at acquisition = NCI% × Fair Value of Subsidiary (full goodwill) or NCI% × FV of net identifiable assets (partial goodwill)

Elimination entry: Eliminate parent's investment against subsidiary's equity at acquisition-date fair values.