|Starting the Second Month of Studying|
Well, it’s already become apparent that my study notebook technique is not working. It’s too time consuming – I feel like I’m copying half the text into my notebook. In the end, I’ll probably just review what I’ve highlighted in the textbook anyway. On my wife’s advice, I’ve switched to writing my own flashcards. The AFP Learning System provides a set of flashcards that I’ll download and print when I’m reviewing, but for now I’m going to create my own set for each chapter as a method of continuous revision.
I bought a box of 500 lined index cards, and I’ve already taken a large chunk out of it. I’ve gone back to chapters 1 and 2 and made flashcards for all the main points – with a question on one side and the answer and page reference on the back. I’ve started taking the flashcards to work so I can skim through them on my commute and on breaks. I can review a whole chapter over the course of a day. I think this will be a lot more effective in the long run.
Chapter 3: Managing Relations with Service Providers
This chapter covers the relationships between organizations and the financial institutions they use (such as banks, investment banks, credit companies). It is interesting to learn the role of investment banks for the issuance of stocks and bonds, and what constitutes non-bank financial institutions – for example, how a company like Ford Motor Credit fits within the financial services industry. It also covers the bank selection process. I found this particularly relevant in relation to my experience, as my former employer changed banks while I was there. In 2009 and 2010 there was an interesting role reversal as the banks effectively chose their customers through the restrictions and limitations the banks imposed in order to get access to credit and borrowing facilities. By placing inflexible restrictions, the companies were then forced to find alternate banks that could accommodate their needs – and usually at a high price! My professional banking experiences are making this chapter information much easier to understand and remember.
Chapter 4: Financial Accounting and Reporting
This chapter has also gone very smoothly for me because I feel very familiar with the material from my work experience. The textbook grid showing the differences between GAAP and IFRS was useful because Canada, which is similar to the US, has yet to switch from GAAP to IFRS accounting standards, and I need the refresher! Plus, here in Australia they already use IFRS, so the faster I catch up on the nuances the better.
This chapter reviews the P&L, balance sheet and cash flow statements, but most people taking the exam should be quite familiar with these. The explanation of how to account for derivatives, hedges and foreign exchange is useful, as this is very topical and continually undergoing increased scrutiny. The explanation of how and when to record gains/loses on hedge instruments is also well presented.
At this point, I’m finding the amount of memorization that’s required a little overwhelming, and I’m surprised by how few calculations there are. I think I’ll be putting in a lot of time with my flashcards over the next three months.