Mnemonics

CFA Level II FRA
#1

A few I use in FRA:

Current Method - “We’re currently seperated.” - Parent and Sub are separate

US HyperInflation - US children are hyper and temperamental - Temporal method - ridelin costs money, so separate out the monetary and nonmonetary assets please dear

IFRS Hyperinflation - Hyper internationals need to employ translators to tell them current events in other countries - International means I for Inflation - adjust everything for inflation and then translate at current

Please post your favorites and I’ll continue to do so if people like them :slight_smile:

#2

For hyperinflation, I think about this:

IFRS (the rest of the freaking world) does things properly - adjust and use the current method.

GAAP ('Murica) does things the way we wanna does things! - screw it, use the temporal method!

EDIT: Maybe others don’t see ANY relationship there, but it’s gotten ME through many a multinational FRA problem.

#3

Serial Correlation - Durbin Watson (bad SEs) : SCDW = Southern comfort? Drink Water

Heteroskedascticity(sp?) - Bruesch pagan (Bad SEs) : HBP = Horny/hetero british P (sorry but it works)

Multicollinearity - significant F (high R2, low T) MSFRT - Many strippers F till reallly low testosterone (again, sorry)

#4

Goodwill impariment:

under IF R S: R ecoverable amount <> carrying value

under G AA P: F a ir value <> carrying value

#5

Damn, CFA does bring some creativity out of people.

Keep it coming guys. I’d go out after the exam and test for some Multicollinearity, as per the definition above.

Personally, my study approach has involved drawing pictures and less of mnemonics, so sorry i couldn’t contribute much.

But for the translations, i simply use S-T (This is the alphabetical order) so for S ame currencies, Use T emporal method.

#6

this was a funny one my friend mentioned a while back, I saw a post on it recently too

C + X/(1+r)^t = P + S

Cocks = Pussy (sorry)

but damn you remember it

#7

^i’d say heteroskedasticity is more appropriate to test for given your location (probably less risk of STEs too (standard errors of course)

#8

CR or current rate method or cristiano ronaldo arrogantly uses their own local currency as functional currency and doesn’t give a dam about parent presentation currency (club) :slight_smile:

#9

C urrent Rate Method => C umulative Translation Adjustment

(note you would only see a “cumulative” translation adjustment on a Balance Sheet)

#10

I think we have enough on current versus temporal - how about other topics?

Anyone know some good ones for Swaps?

#11

C urrent Method - adjustment appears on the B alance Sheet (B & C are next to each other in the alphabet)

T emporal Method - adjustment appears in P &L (while not next to each other, P & T are close enough!)

EDIT: I didn’t ignore the above post, I must have been typing at the same time.

#12

GAAP Pension Expense:

Service Cost

  • Interest
  • Expect Return on PA

± Amortisation of act p/l

± Amortisation past service cost

SIEAA: Strippers In Eastern Asia Advance

IFRS Expense

Current Service

  • Past service

=- Net Interest

CSPSNI: Can Strippers Practice Safe Nasty Intercourse

**I’ve been locked in an office all day, this doesn’t reflect my character but purely a method of augmenting to my current AFers success**

#13

A mnemonic I saw someone else use for Pensions last year that has stuck for me:

To calculate PBO:

Bears Always Imagine Stealing All Bees EndProduct

B ears - B eg PBO

A lways - A mortization of Past current service cost

I magine - I nterest Cost

S tealing - S ervice Cost

A ll - A mendments to plan

B ees - B enefits Paid

E nd Product - E nd PBO

For calculation of FV of the plan:

But Every Average Bear EatsBerriesInstead

B ut - B eg FV of the plan

E very - E mployer Contributions

A verage - A ctual return on plan assets

B ear - B enefits Paid

E ats Berries Instead - E nding FV

#14

hey you dont use ammortized past service cost on calculating the PBO… its just past service cost for the year.

#15

Hah! I think the same for American vs. European options. ‘Murica’ executes options whenver they goddamn want.

#16

I’m sure there are more than a few that just say Americans are just like Europeans, but a little better… :slight_smile:

Or that America is all about Freedom

#17

I remeber that for a FRA, 1 + L(h + m)(h + m /360) goes on top because I just think of the clothing store. I just think “H+M on top,” lol even though it doesn’t mean anything. Then I remeber that h is on the bottom and m is on the right side, by just think left to right. It works for me…

I could really benefit from seeing more people’s Financial Reporting mnemonics :slight_smile:

#18

_ P _artial Goodwill Method: _ P _urchase _ P _rice - P ro-rata Fair Vale

_ F _ull Goodwill: _ F _air Value Target - _ F _air Value INA

#19

These are good - any more?

#20

H-model: Doh! Good s**t, good luck:

http://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91320991