Wiley CPAexcel®

Summary of July 2016 Content Updates

July 1, 2016
The July 2016 Wiley CPAexcel product updates are now available. All updates align with recent AICPA changes to the CPA Exam, including
the addition of Document Review Simulations (DRS). This document provides a summary of what has changed.

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Wiley CPAexcel®

July 2016 Content Updates

AUD | Auditing and Attestation

AICPA CSO Changes: None
Pronouncement Changes: SAS No. 130 and No. 131 eligible for testing January 1, 2017

Wiley Changes
 Statement on Auditing Standards No. 130, “An Audit of Internal
Control Over Financial Reporting That Is Integrated With an
Audit of Financial Statements.” SAS No. 130 will be eligible
for testing on the CPA Exam in January, 2017. Until that time,
this topic is covered by Statement on Standards for Attestation
Engagements No. 15, “An Examination of an Entity’s Internal
Control Over Financial Reporting That Is Integrated With an
Audit of Its Financial Statements.” Candidates for testing in
2016 will be responsible for being familiar with SSAE No. 15.
Candidates for testing in 2017 will, instead, be responsible for
being familiar with SAS No. 130. The Wiley CPAexcel materials
included coverage of both sets of standards along with
guidance as to which standards are applicable to 2016 and
which standards are applicable to 2017. The good news is that
there is a great deal of similarity between the requirements
under SSAE No. 15 and SAS No. 130.

 Statement on Auditing Standards No. 131, “Amendment to
Statement on Auditing Standards No. 122 Section 700, Forming
an Opinion and Reporting on Financial Statements.” This
pronouncement addresses a somewhat technical issue that
is relevant to an audit that is conducted in accordance with
the standards of the PCA OB when the audit is not actually
under the jurisdiction of the PCAOB. Such a circumstance
involves changing the language used (in a rather minor way)
in the auditor’s report. The study materials dealing with the

introduction of the auditor’s reporting language (for audits of
nonissuers) shows how the auditor’s report would be changed
to address such a circumstance.

BEC | Business Environment and Concepts
AICPA CSO Changes: None
Pronouncement Changes: None

Wiley Changes
Corporate Governance: No changes
Economic Concepts and Analysis: All economic data
and graphs used in the study material was updated to reflect the
most current statistical data available.
Financial Management: Some minor topics were added
to the CPAexcel study material, including:
 Present value of a perpetual annuity
 Raising equity through crowdfunding
 Preauthorized debit/credit card charges

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Information Systems and Communications: Revised
the BEC IT content to reflect Changing technologies,
e.g., increasing use of biometric and multi-factor
security systems, Increased emphasis on system
security and controls
Strategic Planning: No changes

Operations Management: A new Balanced Scorecard (BSC)
example was inserted into the BSC lesson to increase the
possibilities of students becoming more familiar with different
metrics and thus classifying them successfully (i.e., into one of the
four BSC categories). These include (1) Financial, (2) Customer, (3)
Internal Business Processes, and (4) Learning and Growth.

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Wiley CPAexcel®

July 2016 Content Updates

FAR | Financial Accounting and Reporting
AICPA CSO Changes: None
Pronouncement Changes: *
Eligible for testing in July 2016


Eligible for testing in January 2017

FASB ASU 2015-16

FASB ASU 2015-11

FASB ASU 2016-03

FASB ASU 2015-17

GASB Statement No. 77

FASB ASU 2016-5

GASB Statement No. 78

FASB ASU 2016-6

GASB Statement No. 79

FASB ASU 2016-7
FASB ASU 2016-9
GASB Statement No. 80

* Not all pronouncements will impact a "newly-licensed" CPA and are, therefore, not likely tested.

Wiley Changes
Financial Accounting
 FASB ASU 2015-11 | Simplifying the measurement

of Inventory: Use of LC-NRV

 GASB Statement No. 80, “Blending Requirements for
Certain Component Units”

 FASB ASU 2015-16 | Simplifying the accounting
for measurement period adjustments

 GASB Statement No. 81, “Irrevocable Split-Interest
Agreements”

 FASB ASU 2015-17 | Classification of deferred taxes

 GASB Statement No. 82, “Pension Issues,” which
replaces “covered employee payroll” in GASB
Statement No. 67, 68, and 73

 FASB ASU 2016-3 | Adoption of PCC standards
 FASB ASU 2016-7 | Transition to equity method

In addition, “Refreshed” the following lessons

 FASB ASU 2015-03 | Accounting for bond issue costs

 Accrual accounting

Not-for-Profit Organizations: No substantive changes

 Special purpose frameworks


Governmental Organizations

 LTD lessons

 GASB Statement No. 77, “Tax Abatement Disclosure,”

 Equity lessons

 GASB Statement No. 78, “Pensions Provided through Certain
Multiple-Employer Defined Benefit Plans”

 Non-monetary exchanges

 GASB Statement No. 79, “Certain External Investment Pools
and Pool Participants”

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Wiley CPAexcel®

July 2016 Content Updates

REG | Regulation
Eligible for testing in October 2016

AICPA CSO Changes: None
Pronouncement Changes:

Bankruptcy code inflation adjustments

Eligible for testing in July 2016
Eligible for testing in January 2017

Annual tax changes

Removal of Dodd-Frank content

December 2015 extended
tax provisions
New due dates that are effective
for returns whose tax year begins
after 12/31/15


Wiley Changes
Ethics, Professional, and Legal Responsibilities: No substantive changes

Business Law
Bankruptcy: Every 3 years, the bankruptcy figures are reviewed and indexed appropriately. In 2016, the 2013 bankruptcy figures will be
tested through the Q3 testing window. The 2016 indexed bankruptcy figures are eligible for testing October 1, 2016.
Bankruptcy Figures

2013*

2016**

Unsecured debt limit

$383,175

$394,725

$1,149,525

$1,184,200

Unsecured claim  12 or more unsecured creditors. need 3 creditors with aggregate of this amount

$15,325

$1,5775

Unsecured claim  fewer than 12 unsecured creditors. any one creditors with this amount


$15,325

$1,5775

Maximum homestead equity  state

$155,765

$160,475

Maximum federal homestead exemption  married

$45,950

$4,7350

Motor vehicle

$3,675

$3,775

$575

$600

Total of household items

$12,250


$12,625

Tools of trade

$2,300

$2,375

Bodily injury

$22,975

$23,675

Secured debt limit

†

Household items  up to/per item

Jewelry

$1,550

$1,600

Contributions to employee benefit plans

$12,475


$12,850

Claims of farm producers and fishermen

$6,150

$6,325

Consumer creditors

$2775

$2,850

* Good for exam through Q3 2016 testing window
** Good on/after October 2016
† The wage claim priority has gone from 90 days to 180 days, like the pension, retirement claims (5th in order of distribution)

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Wiley CPAexcel®

July 2016 Content Updates

Bankruptcy Figures

2013*

2016**

Luxury goods  within 90 days

$650

$675

Cash advance  within 70 days

$925

$950


Federal Tax Process, Procedures,
Accounting, and Planning

Deductions for AGI and Itemized Deductions: These have been
extended to 2015 and 2016.

Most Important Updates for 2016 Tax Law tested beginning
July 1, 2016

 Qualified higher education expenses

Property Transactions

 Deduction of greater of sales taxes or state income taxes

Capital Gains and Losses

 Premiums for qualified mortgage insurance related to
acquisition indebtedness on a qualified residence are
treated as qualified mortgage interest.

 Certain educator expenses

 Qualifying small business stock: Gains from the sale of
qualifying small business stock by noncorporate taxpayers
are eligible for a 100% exclusion.

 Up to $100,000 of distributions from an IRA will be tax-free
if contributed to a charitable organization by an individual

age 70 or over.

Section 1231 Assets: Cost Recovery.
 Qualified leasehold improvement property, qualified retail
improvement property, and qualified restaurant property
are depreciable under the straight-line method over 15
years using the half-year convention.

Individual Tax Issues
AMT and Other Taxes
 No AMT adjustments are required for assets purchased in
2008–2016 that use bonus depreciation.

 Bonus depreciation: Bonus depreciation of 50% is
allowed for new qualifying property placed in service
in 2015 and 2016.

 Qualifying Small Business Stock (QSBS). For QSBS that was
purchased before September 28, 2010, the general rule for
this preference item is that 7% of the gain excluded from
income under the qualified small business stock provision
(see the “Capital Gain and Losses” lesson for more detail)
is a preference item for the AMT. Gain is excluded only if the
stock was held for more than five years, so note that stock
qualifying for this exclusion that was sold in 2016 would
have been purchased before December 31, 2011.

 Section 179: The maximum amount expensed in any year
is limited to the lesser of business income or $500,000 for
2015 and 2016. The Section 179 election is phased out

(dollar for dollar) if qualified assets purchased exceed
$2,010,000 for 2016 ($2,000,000 for 2015).

Deductions
Basic Principles
 Capitalization Regulations: Taxpayers can elect under the de
minimis safe harbor election to expense outlays for lowercost items. The election is irrevocable. This safe harbor
applies if the taxpayer:

 Gain on the sale of qualified small business stock that was
acquired after September 27, 2010, and is sold more than
five years after the purchase date will not be subject to the
AMT. This gain is also completely excluded from regular tax.
Tax Credits (Personal and Business)

–– Has written procedures in place at the beginning of
the tax year that provide for the expensing of amounts
below a specified dollar amount, or that have a useful
life of 12 months or less,

 A taxpayer who erroneously claims the child credit due to
intentional disregard of the rules is ineligible to claim the
credit for a period of two tax years. If the credit is claimed
due to fraud the period is extended to 10 years.

–– Also expenses the items for its accounting/book records,
and

 Alternative motor vehicle credit extended to 2015 and 2016.


–– Insures that items costing more than $5,000
are capitalized. $2,500 if the company does not
have acceptable (generally meaning audited)
financial statements.

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 A taxpayer who erroneously claims the earned income
credit due to intentional disregard of the rules is ineligible
to claim the credit for a period of two tax years. If the credit
is claimed due to fraud the period is extended to 10 years.

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Wiley CPAexcel®

July 2016 Content Updates

 Work opportunity tax credit extended to 2015 and 2016.
 Research credit extended to 2015 and 2016.

Corporations
Special Corporate Deductions
 A corporation’s contribution of inventory or real property
used in its trade or business to charities that use the property
in a manner related to the exempt purpose and solely for the
care of the ill, needy, or infants, or where the property is used
for research purposes under specified conditions, is subject
to special rules. The deduction is
the lower of:
AB of property + 50% x (FMV – Adjusted Basis),
or 2 x Adjusted Basis
 This rule applies for contributions of “wholesome”
food inventory by corporations and other businesses to
charities that use the food in an appropriate manner. These
contributions can also be deducted up to 15% of taxable
income (instead of the regular 10% limit). Note that this rule
applies to all businesses, not just corporations.

S Corporations
Income and Basis: The following provision was made permanent.
 If an S corporation contributes appreciated property to
a charitable organization, the corporation can deduct the
fair market value of the property. However, S corporation

shareholders can reduce their basis by only the
contributed property’s basis.
Distributions and Special Taxes: The following provision was
made permanent.
 The Built-In Gains Tax can only be imposed for a period of
5 years after the S election is made.

Tax Research and Practice
Compliance Responsibilities
 Statute of Limitations: The statute is extended to six
years if more than 25% of the gross income is understated
on the original tax return. The six year rule also applies if
the understatement in income is due to the overstatement
of the basis of an asset.

Summary of Due Dates  beginning in 2016
Tax Return

Regular
Due Date*

Extended
Due Date**

Individual

15th day of
4th month

6 months


Corporation  calendar year

15th day of
3rd month

6 months

Corporation  june 30

15th day of
3rd month

7 months

Corporation  all others

15th day of
4th month

6 months

S Corporation

15th day of
3rd month

6 months

Partnership


15th day of
3rd month

6 months

Fiduciaries  estates and trusts

15th day of
4th month

5 1/2 months

Tax-Exempt Organizations

15th day of
5th month

6 months

9 months after
date of death

6 month

Estate Tax
* Months after Year-End
** Months after Regular Due Date

 Preparer Penalties: If the understated tax liability is due to

an unreasonable position and the preparer willfully attempts
to understate the tax liability or recklessly or intentionally
disregards rules or regulations, the penalty is the greater of
$5,000 or 75% of the income earned by the tax preparer for
preparing the return or claim.
Additional penalties may be imposed on preparers for:
 Not signing returns done for compensation ($50 per failure;
maximum of $25,500 per year; 2016).
 Not providing a copy of the return for the taxpayer
($50 per failure; maximum of $25,500 per year; 2016).
 Not keeping a list of returns filed ($50 per failure; maximum
of $25,500 per year; 2016). The same penalty applies for not
keeping a list of tax return preparers hired to prepare returns.
 $510 (2016) for each instance of endorsing or negotiating
a refund check.
 Failure to provide the taxpayer’s identifying number on the
return ($50 per failure; maximum of $25,500 per year; 2016).
 preparer can be fined $500 per failure if he or she does not
exercise due diligence in determining if a taxpayer is eligible
for the earned income credit, child tax credit, or American
Opportunity tax credit.

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Wiley CPAexcel®

July 2016 Content Updates

DRS | Document Review Simulations
Over 10 Document Review Simulations have been added to the Wiley CPAexcel Test Bank. To access them, log in and navigate to the
simulations section.
AUD

DRS 1

Test Bank  Simulations  Module  Engagement Planning
Assignment 22  Auditing & Attestation  Planning Activities 2  Risk, Materiality, Analysis and Fraud  Audit Risk
Question ID : tbs.AUDDocrev001

DRS 2

Test Bank  Simulations  Module  Internal Control

Assignment 38  Auditing & Attestation  Internal Control  Concepts and Standards  Internal Control Concepts 2
Question ID : tbs.AUDDocrev002

DRS 3

Test Bank  Simulations  Module  Evidence
Assignment 66  Auditing & Attestation  Audit Evidence  Specific Audit Areas  Cash
Question ID : tbs.AUDDocrev004

DRS 4

Test Bank  Simulations  Module  Evidence
Assignment 66  Auditing & Attestation  Audit Evidence  Specific Audit Areas  Inventory
Question ID : tbs.AUDDocrev003

DRS 5

Test Bank  Simulations  Module  Reporting
Assignment 112  Auditing & Attestation  Audit Reports  Qualified for Misstatement
Question ID : tbs.AUDDocrev005

FAR

DRS 1

Test Bank  Simulations  Module  Inventory
Assignment 64  Financial Statement Accounts  Inventory
Question ID : tbs.TBSDocrev0002

DRS 2


Test Bank  Simulations  Module  Derivative Instruments and Hedging Activities
Assignment 195  Specific Transactions, Events and Disclosures  Commitments, Contingencies, and Guarantees
Question ID : tbs.FARDocrev002

DRS 3

Test Bank  Simulations  Module  Statement of Cash Flows
Assignment 64  Financial Statement Accounts  Cash  Bank Reconciliations
Question ID : tbs.FARDocrev001

DRS 4

Test Bank  Simulations  Module  Monetary Current Assets and Current Liabilities
Assignment 108  Financial Statement Accounts  Long-Term Debt (Financial Liabilities)  Troubled Debt Restructuring by
Debtors
Question ID : tbs.FARDocrev004

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Wiley CPAexcel®

July 2016 Content Updates

FAR

DRS 5

Test Bank  Simulations  Module  Deferred Taxes
Assignment 131  Financial Statement Accounts  Deferred Compensation Arrangements  Pension Expenses
Question ID : tbs.FARDocrev005

REG

DRS 1

Test Bank  Simulations  Module  Property
Assignment 81  Federal Taxation  Property Transactions  Section 1231 Assets  Cost Recovery
Question ID : tbs.REGDocrev001

DRS 2


Test Bank  Simulations  Module  Corporate Taxation
Assignment 115  Federal Taxation  Corporate Taxation  Formation of a Corporation
Question ID : tbs.REGDocrev002

DRS 3

Test Bank  Simulations  Module  Individual Taxation
Assignment 101  Federal Taxation  Individual Tax Issues  Filing Status
Question ID : tbs.REGDocrev003

DRS 4

Test Bank  Simulations  Module  Individual Taxation
Assignment 125  Federal Taxation  Distributions
Question ID : tbs.REGDOCrev004

DRS 5

Test Bank  Simulations  Module  Individual Taxation
Assignment 138  Federal Taxation  Estate and Gift Taxation  Federal Estate Tax
Question ID : tbs.REGDocrev005

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