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CFA Level 1 - LOS Changes 2014 - 2015
Topic
LOS
Level I - 2014 (532 LOS)
LOS
Level I - 2015 (529 LOS) Compared
Ethics 1.1.a
describe the structure of the CFA
Institute Professional Conduct Program
and the process for the enforcement of
the Code and Standards
1.1.a
describe the structure of the CFA
Institute Professional Conduct Program
and the process for the enforcement of
the Code and Standards
Ethics 1.1.b
state the six components of the Code of
Ethics and the seven Standards of
Professional Conduct
1.1.b
state the six components of the Code of
Ethics and the seven Standards of
Professional Conduct
Ethics 1.1.c
explain the ethical responsibilities
required by the Code and Standards,
including the sub-sections of each
Standard
1.1.c

explain the ethical responsibilities
required by the Code and Standards,
including the sub-sections of each
Standard
Ethics 1.2.a
demonstrate the application of the Code
of Ethics and Standards of Professional
Conduct to situations involving issues of
professional integrity
1.2.a
demonstrate the application of the Code
of Ethics and Standards of Professional
Conduct to situations involving issues of
professional integrity
Ethics 1.2.b
distinguish between conduct that
conforms to the Code and Standards
and conduct that violates the Code and
Standards
1.2.b
distinguish between conduct that
conforms to the Code and Standards
and conduct that violates the Code and
Standards
Ethics 1.2.c
recommend practices and procedures
designed to prevent violations of the
Code of Ethics and Standards of
Professional Conduct
1.2.c

recommend practices and procedures
designed to prevent violations of the
Code of Ethics and Standards of
Professional Conduct
Ethics 1.3.a
explain why the GIPS standards were
created, what parties the GIPS
standards apply to, and who is served
by the standards
1.3.a
explain why the GIPS standards were
created, what parties the GIPS
standards apply to, and who is served
by the standards
Ethics 1.3.b
explain the construction and purpose of
composites in performance reporting
1.3.b
explain the construction and purpose of
composites in performance reporting
Ethics 1.3.c explain the requirements for verification 1.3.c explain the requirements for verification
Ethics 1.4.a
describe the key features of the GIPS
standards and the fundamentals of
compliance
1.4.a
describe the key features of the GIPS
standards and the fundamentals of
compliance
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Ethics 1.4.b
describe the scope of the GIPS
standards with respect to an investment
firm’s definition and historical
performance record
1.4.b
describe the scope of the GIPS
standards with respect to an investment
firm’s definition and historical
performance record
Ethics 1.4.c
explain how the GIPS standards are
implemented in countries with existing
standards for performance reporting
and describe the appropriate response
when the GIPS standards and local
regulations conflict
1.4.c
explain how the GIPS standards are
implemented in countries with existing
standards for performance reporting
and describe the appropriate response
when the GIPS standards and local
regulations conflict
Ethics 1.4.d
describe the nine major sections of the
GIPS standards
1.4.d
describe the nine major sections of the
GIPS standards

Quantitative 2.5.a
interpret interest rates as required rates
of return, discount rates, or opportunity
costs
2.5.a
interpret interest rates as required rates
of return, discount rates, or opportunity
costs
Quantitative 2.5.b
explain an interest rate as the sum of a
real risk-free rate, and premiums that
compensate investors for bearing
distinct types of risk
2.5.b
explain an interest rate as the sum of a
real risk-free rate, and premiums that
compensate investors for bearing
distinct types of risk
Quantitative 2.5.c
calculate and interpret the effective
annual rate, given the stated annual
interest rate and the frequency of
compounding
2.5.c
calculate and interpret the effective
annual rate, given the stated annual
interest rate and the frequency of
compounding
Quantitative 2.5.d
solve time value of money problems for

different frequencies of compounding
2.5.d
solve time value of money problems for
different frequencies of compounding
Quantitative 2.5.e
calculate and interpret the future value
(FV) and present value (PV) of a single
sum of money, an ordinary annuity, an
annuity due, a perpetuity (PV only), and
a series of unequal cash flows
2.5.e
calculate and interpret the future value
(FV) and present value (PV) of a single
sum of money, an ordinary annuity, an
annuity due, a perpetuity (PV only), and
a series of unequal cash flows
Quantitative 2.5.f
demonstrate the use of a time line in
modeling and solving time value of
money problems
2.5.f
demonstrate the use of a time line in
modeling and solving time value of
money problems
Quantitative 2.6.a
calculate and interpret the net present
value (NPV) and the internal rate of
return (IRR) of an investment
2.6.a
calculate and interpret the net present

value (NPV) and the internal rate of
return (IRR) of an investment
Quantitative 2.6.b
contrast the NPV rule to the IRR rule,
and identify problems associated with
the IRR rule
2.6.b
contrast the NPV rule to the IRR rule,
and identify problems associated with
the IRR rule
Quantitative 2.6.c
calculate and interpret a holding period
return (total return)
2.6.c
calculate and interpret a holding period
return (total return)
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Quantitative 2.6.d
calculate and compare the money-
weighted and time-weighted rates of
return of a portfolio and evaluate the
performance of portfolios based on
these measures
2.6.d
calculate and compare the money-
weighted and time-weighted rates of
return of a portfolio and evaluate the
performance of portfolios based on
these measures
Quantitative 2.6.e

calculate and interpret the bank
discount yield, holding period yield,
effective annual yield, and money
market yield for U.S. Treasury bills and
other money market instruments
2.6.e
calculate and interpret the bank
discount yield, holding period yield,
effective annual yield, and money
market yield for U.S. Treasury bills and
other money market instruments
Quantitative 2.6.f
convert among holding period yields,
money market yields, effective annual
yields, and bond equivalent yields
2.6.f
convert among holding period yields,
money market yields, effective annual
yields, and bond equivalent yields
Quantitative 2.7.a
distinguish between descriptive
statistics and inferential statistics,
between a population and a sample,
and among the types of measurement
scales
2.7.a
distinguish between descriptive
statistics and inferential statistics,
between a population and a sample,
and among the types of measurement

scales
Quantitative 2.7.b
define a parameter, a sample statistic,
and a frequency distribution
2.7.b
define a parameter, a sample statistic,
and a frequency distribution
Quantitative 2.7.c
calculate and interpret relative
frequencies and cumulative relative
frequencies, given a frequency
distribution
2.7.c
calculate and interpret relative
frequencies and cumulative relative
frequencies, given a frequency
distribution
Quantitative 2.7.d
describe the properties of a data set
presented as a histogram or a
frequency polygon
2.7.d
describe the properties of a data set
presented as a histogram or a
frequency polygon
Quantitative 2.7.e
calculate and interpret measures of
central tendency, including the
population mean, sample mean,
arithmetic mean, weighted average or

mean, geometric mean, harmonic
mean, median, and mode
2.7.e
calculate and interpret measures of
central tendency, including the
population mean, sample mean,
arithmetic mean, weighted average or
mean, geometric mean, harmonic
mean, median, and mode
Quantitative 2.7.f
calculate and interpret quartiles,
quintiles, deciles, and percentiles
2.7.f
calculate and interpret quartiles,
quintiles, deciles, and percentiles
Quantitative 2.7.g
calculate and interpret 1) a range and a
mean absolute deviation and 2) the
variance and standard deviation of a
population and of a sample
2.7.g
calculate and interpret 1) a range and a
mean absolute deviation and 2) the
variance and standard deviation of a
population and of a sample
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Quantitative 2.7.h
calculate and interpret the proportion of
observations falling within a specified
number of standard deviations of the

mean using Chebyshev’s inequality
2.7.h
calculate and interpret the proportion of
observations falling within a specified
number of standard deviations of the
mean using Chebyshev’s inequality
Quantitative 2.7.i
calculate and interpret the coefficient of
variation and the Sharpe ratio
2.7.i
calculate and interpret the coefficient of
variation and the Sharpe ratio
Quantitative 2.7.j
explain skewness and the meaning of a
positively or negatively skewed return
distribution
2.7.j
explain skewness and the meaning of a
positively or negatively skewed return
distribution
Quantitative 2.7.k
describe the relative locations of the
mean, median, and mode for a
unimodal, nonsymmetrical distribution
2.7.k
describe the relative locations of the
mean, median, and mode for a
unimodal, nonsymmetrical distribution
Quantitative 2.7.l
explain measures of sample skewness

and kurtosis
2.7.l
explain measures of sample skewness
and kurtosis
Quantitative 2.7.m
compare the use of arithmetic and
geometric means when analyzing
investment returns
2.7.m
compare the use of arithmetic and
geometric means when analyzing
investment returns
Quantitative 2.8.a
define a random variable, an outcome,
an event, mutually exclusive events,
and exhaustive events
2.8.a
define a random variable, an outcome,
an event, mutually exclusive events,
and exhaustive events
Quantitative 2.8.b
state the two defining properties of
probability and distinguish among
empirical, subjective, and a priori
probabilities
2.8.b
state the two defining properties of
probability and distinguish among
empirical, subjective, and a priori
probabilities

Quantitative 2.8.c
state the probability of an event in
terms of odds for and against the event
2.8.c
state the probability of an event in
terms of odds for and against the event
Quantitative 2.8.d
distinguish between unconditional and
conditional probabilities
2.8.d
distinguish between unconditional and
conditional probabilities
Quantitative 2.8.e
explain the multiplication, addition, and
total probability rules
2.8.e
explain the multiplication, addition, and
total probability rules
Quantitative 2.8.f
calculate and interpret 1) the joint
probability of two events, 2) the
probability that at least one of two
events will occur, given the probability
of each and the joint probability of the
two events, and 3) a joint probability of
any number of independent events
2.8.f
calculate and interpret 1) the joint
probability of two events, 2) the
probability that at least one of two

events will occur, given the probability
of each and the joint probability of the
two events, and 3) a joint probability of
any number of independent events
Quantitative 2.8.g
distinguish between dependent and
independent events
2.8.g
distinguish between dependent and
independent events
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Quantitative 2.8.h
calculate and interpret an unconditional
probability using the total probability
rule
2.8.h
calculate and interpret an unconditional
probability using the total probability
rule
Quantitative 2.8.i
explain the use of conditional
expectation in investment applications
2.8.i
explain the use of conditional
expectation in investment applications
Quantitative 2.8.j
explain the use of a tree diagram to
represent an investment problem
2.8.j
explain the use of a tree diagram to

represent an investment problem
Quantitative 2.8.k
calculate and interpret covariance and
correlation
2.8.k
calculate and interpret covariance and
correlation
Quantitative 2.8.l
calculate and interpret the expected
value, variance, and standard deviation
of a random variable and of returns on
a portfolio
2.8.l
calculate and interpret the expected
value, variance, and standard deviation
of a random variable and of returns on
a portfolio
Quantitative 2.8.m
calculate and interpret covariance given
a joint probability function
2.8.m
calculate and interpret covariance given
a joint probability function
Quantitative 2.8.n
calculate and interpret an updated
probability using Bayes’ formula
2.8.n
calculate and interpret an updated
probability using Bayes’ formula
Quantitative 2.8.o

identify the most appropriate method to
solve a particular counting problem, and
solve counting problems using factorial,
combination, and permutation concepts
2.8.o
identify the most appropriate method to
solve a particular counting problem, and
solve counting problems using factorial,
combination, and permutation concepts
Quantitative 3.9.a
define a probability distribution and
distinguish between discrete and
continuous random variables and their
probability functions
3.9.a
define a probability distribution and
distinguish between discrete and
continuous random variables and their
probability functions
Quantitative 3.9.b
describe the set of possible outcomes of
a specified discrete random variable
3.9.b
describe the set of possible outcomes of
a specified discrete random variable
Quantitative 3.9.c
interpret a cumulative distribution
function
3.9.c
interpret a cumulative distribution

function
Quantitative 3.9.d
calculate and interpret probabilities for
a random variable, given its cumulative
distribution function
3.9.d
calculate and interpret probabilities for
a random variable, given its cumulative
distribution function
Quantitative 3.9.e
define a discrete uniform random
variable, a Bernoulli random variable,
and a binomial random variable
3.9.e
define a discrete uniform random
variable, a Bernoulli random variable,
and a binomial random variable
Quantitative 3.9.f
calculate and interpret probabilities
given the discrete uniform and the
binomial distribution functions
3.9.f
calculate and interpret probabilities
given the discrete uniform and the
binomial distribution functions
Quantitative 3.9.g
construct a binomial tree to describe
stock price movement
3.9.g
construct a binomial tree to describe

stock price movement
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Quantitative 3.9.h calculate and interpret tracking error 3.9.h calculate and interpret tracking error
Quantitative 3.9.i
define the continuous uniform
distribution and calculate and interpret
probabilities, given a continuous
uniform distribution
3.9.i
define the continuous uniform
distribution and calculate and interpret
probabilities, given a continuous
uniform distribution
Quantitative 3.9.j
explain the key properties of the normal
distribution
3.9.j
explain the key properties of the normal
distribution
Quantitative 3.9.k
distinguish between a univariate and a
multivariate distribution, and explain
the role of correlation in the
multivariate normal distribution
3.9.k
distinguish between a univariate and a
multivariate distribution, and explain
the role of correlation in the
multivariate normal distribution
Quantitative 3.9.l

determine the probability that a
normally distributed random variable
lies inside a given interval
3.9.l
determine the probability that a
normally distributed random variable
lies inside a given interval
Quantitative 3.9.m
define the standard normal distribution,
explain how to standardize a random
variable, and calculate and interpret
probabilities using the standard normal
distribution
3.9.m
define the standard normal distribution,
explain how to standardize a random
variable, and calculate and interpret
probabilities using the standard normal
distribution
Quantitative 3.9.n
define shortfall risk, calculate the safety-
first ratio, and select an optimal
portfolio using Roy’s safety-first
criterion
3.9.n
define shortfall risk, calculate the safety-
first ratio, and select an optimal
portfolio using Roy’s safety-first
criterion
Quantitative 3.9.o

explain the relationship between normal
and lognormal distributions and why the
lognormal distribution is used to model
asset prices
3.9.o
explain the relationship between normal
and lognormal distributions and why the
lognormal distribution is used to model
asset prices
Quantitative 3.9.p
distinguish between discretely and
continuously compounded rates of
return, and calculate and interpret a
continuously compounded rate of
return, given a specific holding period
return
3.9.p
distinguish between discretely and
continuously compounded rates of
return, and calculate and interpret a
continuously compounded rate of
return, given a specific holding period
return
Quantitative 3.9.q
explain Monte Carlo simulation and
describe its major applications and
limitations
3.9.q
explain Monte Carlo simulation and
describe its applications and limitations

Wording
Change
Quantitative 3.9.r
compare Monte Carlo simulation and
historical simulation
3.9.r
compare Monte Carlo simulation and
historical simulation
Quantitative 3.10.a
define simple random sampling and a
sampling distribution
3.10.a
define simple random sampling and a
sampling distribution
Quantitative 3.10.b explain sampling error 3.10.b explain sampling error
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Quantitative 3.10.c
distinguish between simple random and
stratified random sampling
3.10.c
distinguish between simple random and
stratified random sampling
Quantitative 3.10.d
distinguish between time-series and
cross-sectional data
3.10.d
distinguish between time-series and
cross-sectional data
Quantitative 3.10.e
explain the central limit theorem and its

importance
3.10.e
explain the central limit theorem and its
importance
Quantitative 3.10.f
calculate and interpret the standard
error of the sample mean
3.10.f
calculate and interpret the standard
error of the sample mean
Quantitative 3.10.g
identify and describe desirable
properties of an estimator
3.10.g
identify and describe desirable
properties of an estimator
Quantitative 3.10.h
distinguish between a point estimate
and a confidence interval estimate of a
population parameter
3.10.h
distinguish between a point estimate
and a confidence interval estimate of a
population parameter
Quantitative 3.10.i
describe properties of Student’s t-
distribution and calculate and interpret
its degrees of freedom
3.10.i
describe properties of Student’s t-

distribution and calculate and interpret
its degrees of freedom
Quantitative 3.10.j
calculate and interpret a confidence
interval for a population mean, given a
normal distribution with 1) a known
population variance, 2) an unknown
population variance, or 3) an unknown
variance and a large sample size
3.10.j
calculate and interpret a confidence
interval for a population mean, given a
normal distribution with 1) a known
population variance, 2) an unknown
population variance, or 3) an unknown
variance and a large sample size
Quantitative 3.10.k
describe the issues regarding selection
of the appropriate sample size, data-
mining bias, sample selection bias,
survivorship bias, look-ahead bias, and
time-period bias
3.10.k
describe the issues regarding selection
of the appropriate sample size, data-
mining bias, sample selection bias,
survivorship bias, look-ahead bias, and
time-period bias
Quantitative 3.11.a
define a hypothesis, describe the steps

of hypothesis testing, and describe and
interpret the choice of the null and
alternative hypotheses
3.11.a
define a hypothesis, describe the steps
of hypothesis testing, and describe and
interpret the choice of the null and
alternative hypotheses
Quantitative 3.11.b
distinguish between one-tailed and two-
tailed tests of hypotheses
3.11.b
distinguish between one-tailed and two-
tailed tests of hypotheses
Quantitative 3.11.c
explain a test statistic, Type I and Type
II errors, a significance level, and how
significance levels are used in
hypothesis testing
3.11.c
explain a test statistic, Type I and Type
II errors, a significance level, and how
significance levels are used in
hypothesis testing
Quantitative 3.11.d
explain a decision rule, the power of a
test, and the relation between
confidence intervals and hypothesis
tests
3.11.d

explain a decision rule, the power of a
test, and the relation between
confidence intervals and hypothesis
tests
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Quantitative 3.11.e
distinguish between a statistical result
and an economically meaningful result
3.11.e
distinguish between a statistical result
and an economically meaningful result
Quantitative 3.11.f
explain and interpret the p-value as it
relates to hypothesis testing
3.11.f
explain and interpret the p-value as it
relates to hypothesis testing
Quantitative 3.11.g
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the
population mean of both large and small
samples when the population is
normally or approximately distributed
and the variance is 1) known or 2)
unknown
3.11.g
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the

population mean of both large and small
samples when the population is
normally or approximately distributed
and the variance is 1) known or 2)
unknown
Quantitative 3.11.h
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the equality
of the population means of two at least
approximately normally distributed
populations, based on independent
random samples with 1) equal or 2)
unequal assumed variances
3.11.h
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the equality
of the population means of two at least
approximately normally distributed
populations, based on independent
random samples with 1) equal or 2)
unequal assumed variances
Quantitative 3.11.i
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the mean
difference of two normally distributed
populations
3.11.i

identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the mean
difference of two normally distributed
populations
Quantitative 3.11.j
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning 1) the
variance of a normally distributed
population, and 2) the equality of the
variances of two normally distributed
populations based on two independent
random samples
3.11.j
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning 1) the
variance of a normally distributed
population, and 2) the equality of the
variances of two normally distributed
populations based on two independent
random samples
Quantitative 3.11.k
distinguish between parametric and
nonparametric tests and describe
situations in which the use of
nonparametric tests may be appropriate
3.11.k
distinguish between parametric and

nonparametric tests and describe
situations in which the use of
nonparametric tests may be appropriate
Quantitative 3.12.a
explain principles of technical analysis,
its applications, and its underlying
assumptions
3.12.a
explain principles of technical analysis,
its applications, and its underlying
assumptions
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Quantitative 3.12.b
describe the construction of different
types of technical analysis charts and
interpret them
3.12.b
describe the construction of different
types of technical analysis charts and
interpret them
Quantitative 3.12.c
explain uses of trend, support,
resistance lines, and change in polarity
3.12.c
explain uses of trend, support,
resistance lines, and change in polarity
Quantitative 3.12.d describe common chart patterns 3.12.d describe common chart patterns
Quantitative 3.12.e
describe common technical analysis
indicators (price-based, momentum

oscillators, sentiment, and flow of
funds)
3.12.e
describe common technical analysis
indicators (price-based, momentum
oscillators, sentiment, and flow of
funds)
Quantitative 3.12.f
explain how technical analysts use
cycles
3.12.f
explain how technical analysts use
cycles
Quantitative 3.12.g
describe the key tenets of Elliott Wave
Theory and the importance of Fibonacci
numbers
3.12.g
describe the key tenets of Elliott Wave
Theory and the importance of Fibonacci
numbers
Quantitative 3.12.h
describe intermarket analysis as it
relates to technical analysis and asset
allocation
3.12.h
describe intermarket analysis as it
relates to technical analysis and asset
allocation
Economics 4.13.a distinguish among types of markets 4.13.a distinguish among types of markets

Economics 4.13.b
explain the principles of demand and
supply
4.13.b
explain the principles of demand and
supply
Economics 4.13.c
describe causes of shifts in and
movements along demand and supply
curves
4.13.c
describe causes of shifts in and
movements along demand and supply
curves
Economics 4.13.d
describe the process of aggregating
demand and supply curves
4.13.d
describe the process of aggregating
demand and supply curves
Economics 4.13.e
describe the concept of equilibrium
(partial and general), and mechanisms
by which markets achieve equilibrium
4.13.e
describe the concept of equilibrium
(partial and general), and mechanisms
by which markets achieve equilibrium
Economics 4.13.f
distinguish between stable and unstable

equilibria, including price bubbles, and
identify instances of such equilibria
4.13.f
distinguish between stable and unstable
equilibria, including price bubbles, and
identify instances of such equilibria
Economics 4.13.g
calculate and interpret individual and
aggregate demand, and inverse demand
and supply functions, and interpret
individual and aggregate demand and
supply curves
4.13.g
calculate and interpret individual and
aggregate demand, and inverse demand
and supply functions, and interpret
individual and aggregate demand and
supply curves
Economics 4.13.h
calculate and interpret the amount of
excess demand or excess supply
associated with a non-equilibrium price
4.13.h
calculate and interpret the amount of
excess demand or excess supply
associated with a non-equilibrium price
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Economics 4.13.i
describe types of auctions and calculate
the winning price(s) of an auction

4.13.i
describe types of auctions and calculate
the winning price(s) of an auction
Economics 4.13.j
calculate and interpret consumer
surplus, producer surplus, and total
surplus
4.13.j
calculate and interpret consumer
surplus, producer surplus, and total
surplus
Economics 4.13.k
describe how government regulation
and intervention affect demand and
supply
4.13.k
describe how government regulation
and intervention affect demand and
supply
Economics 4.13.l
forecast the effect of the introduction
and the removal of a market
interference (e.g., a price floor or
ceiling) on price and quantity
4.13.l
forecast the effect of the introduction
and the removal of a market
interference (e.g., a price floor or
ceiling) on price and quantity
Economics 4.13.m

calculate and interpret price, income,
and cross-price elasticities of demand
and describe factors that affect each
measure
4.13.m
calculate and interpret price, income,
and cross-price elasticities of demand
and describe factors that affect each
measure
Economics 4.14.a
describe consumer choice theory and
utility theory
4.14.a
describe consumer choice theory and
utility theory
Economics 4.14.b
describe the use of indifference curves,
opportunity sets, and budget constraints
in decision making
4.14.b
describe the use of indifference curves,
opportunity sets, and budget constraints
in decision making
Economics 4.14.c
calculate and interpret a budget
constraint
4.14.c
calculate and interpret a budget
constraint
Economics 4.14.d

determine a consumer’s equilibrium
bundle of goods based on utility
analysis
4.14.d
determine a consumer’s equilibrium
bundle of goods based on utility
analysis
Economics 4.14.e
compare substitution and income effects
4.14.e
compare substitution and income effects
Economics 4.14.f
distinguish between normal goods and
inferior goods, and explain Giffen goods
and Veblen goods in this context
4.14.f
distinguish between normal goods and
inferior goods, and explain Giffen goods
and Veblen goods in this context
Economics 4.15.a
calculate, interpret, and compare
accounting profit, economic profit,
normal profit, and economic rent
4.15.a
calculate, interpret, and compare
accounting profit, economic profit,
normal profit, and economic rent
Economics 4.15.b
calculate and interpret and compare
total, average, and marginal revenue

4.15.b
calculate and interpret and compare
total, average, and marginal revenue
Economics 4.15.c describe a firm’s factors of production 4.15.c describe a firm’s factors of production
Economics 4.15.d
calculate and interpret total, average,
marginal, fixed, and variable costs
4.15.d
calculate and interpret total, average,
marginal, fixed, and variable costs
Economics 4.15.e
determine and describe breakeven and
shutdown points of production
4.15.e
determine and describe breakeven and
shutdown points of production
www.passingscore.net 11
Economics 4.15.f
describe approaches to determining the
profit-maximizing level of output
4.15.f
describe approaches to determining the
profit-maximizing level of output
Economics 4.15.g
describe how economies of scale and
diseconomies of scale affect costs
4.15.g
describe how economies of scale and
diseconomies of scale affect costs
Economics 4.15.h

distinguish between short-run and long-
run profit maximization
4.15.h
distinguish between short-run and long-
run profit maximization
Economics 4.15.i
distinguish among decreasing-cost,
constant-cost, and increasing-cost
industries and describe the long-run
supply of each
4.15.i
distinguish among decreasing-cost,
constant-cost, and increasing-cost
industries and describe the long-run
supply of each
Economics 4.15.j
calculate and interpret total, marginal,
and average product of labor
4.15.j
calculate and interpret total, marginal,
and average product of labor
Economics 4.15.k
describe the phenomenon of diminishing
marginal returns and calculate and
interpret the profit-maximizing
utilization level of an input
4.15.k
describe the phenomenon of diminishing
marginal returns and calculate and
interpret the profit-maximizing

utilization level of an input
Economics 4.15.l
determine the optimal combination of
resources that minimizes cost
4.15.l
determine the optimal combination of
resources that minimizes cost
Economics 4.16.a
describe characteristics of perfect
competition, monopolistic competition,
oligopoly, and pure monopoly
4.16.a
describe characteristics of perfect
competition, monopolistic competition,
oligopoly, and pure monopoly
Economics 4.16.b
explain relationships between price,
marginal revenue, marginal cost,
economic profit, and the elasticity of
demand under each market structure
4.16.b
explain relationships between price,
marginal revenue, marginal cost,
economic profit, and the elasticity of
demand under each market structure
Economics 4.16.c
describe a firm’s supply function under
each market structure
4.16.c
describe a firm’s supply function under

each market structure
Economics 4.16.d
describe and determine the optimal
price and output for firms under each
market structure
4.16.d
describe and determine the optimal
price and output for firms under each
market structure
Economics 4.16.e
explain factors affecting long-run
equilibrium under each market structure
4.16.e
explain factors affecting long-run
equilibrium under each market structure
Economics 4.16.f
describe pricing strategy under each
market structure
4.16.f
describe pricing strategy under each
market structure
Economics 4.16.g
describe the use and limitations of
concentration measures in identifying
market structure
4.16.g
describe the use and limitations of
concentration measures in identifying
market structure
Economics 4.16.h

identify the type of market structure
within which a firm operates
4.16.h
identify the type of market structure
within which a firm operates
www.passingscore.net 12
Economics 5.17.a
calculate and explain gross domestic
product (GDP) using expenditure and
income approaches
5.17.a
calculate and explain gross domestic
product (GDP) using expenditure and
income approaches
Economics 5.17.b
compare the sum-of-value-added and
value-of-final-output methods of
calculating GDP
5.17.b
compare the sum-of-value-added and
value-of-final-output methods of
calculating GDP
Economics 5.17.c
compare nominal and real GDP and
calculate and interpret the GDP deflator
5.17.c
compare nominal and real GDP and
calculate and interpret the GDP deflator
Economics 5.17.d
compare GDP, national income, personal

income, and personal disposable income
5.17.d
compare GDP, national income, personal
income, and personal disposable income
Economics 5.17.e
explain the fundamental relationship
among saving, investment, the fiscal
balance, and the trade balance
5.17.e
explain the fundamental relationship
among saving, investment, the fiscal
balance, and the trade balance
Economics 5.17.f
explain the IS and LM curves and how
they combine to generate the aggregate
demand curve
5.17.f
explain the IS and LM curves and how
they combine to generate the aggregate
demand curve
Economics 5.17.g
explain the aggregate supply curve in
the short run and long run
5.17.g
explain the aggregate supply curve in
the short run and long run
Economics 5.17.h
explain causes of movements along and
shifts in aggregate demand and supply
curves

5.17.h
explain causes of movements along and
shifts in aggregate demand and supply
curves
Economics 5.17.i
describe how fluctuations in aggregate
demand and aggregate supply cause
short-run changes in the economy and
the business cycle
5.17.i
describe how fluctuations in aggregate
demand and aggregate supply cause
short-run changes in the economy and
the business cycle
Economics 5.17.j
distinguish between the following types
of macroeconomic equilibria: long-run
full employment, short-run recessionary
gap, short-run inflationary gap, and
short-run stagflation
New
Economics 5.17.j
explain how a short-run macroeconomic
equilibrium may occur at a level above
or below full employment
5.17.k
explain how a short-run macroeconomic
equilibrium may occur at a level above
or below full employment
Economics 5.17.k

analyze the effect of combined changes
in aggregate supply and demand on the
economy
5.17.l
analyze the effect of combined changes
in aggregate supply and demand on the
economy
Economics 5.17.l
describe sources, measurement, and
sustainability of economic growth
5.17.m
describe sources, measurement, and
sustainability of economic growth
www.passingscore.net 13
Economics 5.17.m
describe the production function
approach to analyzing the sources of
economic growth
5.17.n
describe the production function
approach to analyzing the sources of
economic growth
Economics 5.17.n
distinguish between input growth and
growth of total factor productivity as
components of economic growth
5.17.o
distinguish between input growth and
growth of total factor productivity as
components of economic growth

Economics 5.18.a
describe the business cycle and its
phases
5.18.a
describe the business cycle and its
phases
Economics 5.18.b
describe how resource use, housing
sector activity, and external trade sector
activity vary as an economy moves
through the business cycle
5.18.b
describe how resource use, housing
sector activity, and external trade sector
activity vary as an economy moves
through the business cycle
Economics 5.18.c describe theories of the business cycle 5.18.c describe theories of the business cycle
Economics 5.18.d
describe types of unemployment and
measures of unemployment
5.18.d
describe types of unemployment and
measures of unemployment
Economics 5.18.e
explain inflation, hyperinflation,
disinflation, and deflation
5.18.e
explain inflation, hyperinflation,
disinflation, and deflation
Economics 5.18.f

explain the construction of indices used
to measure inflation
5.18.f
explain the construction of indices used
to measure inflation
Economics 5.18.g
compare inflation measures, including
their uses and limitations
5.18.g
compare inflation measures, including
their uses and limitations
Economics 5.18.h
distinguish between cost-push and
demand-pull inflation
5.18.h
distinguish between cost-push and
demand-pull inflation
Economics 5.18.i
describe economic indicators, including
their uses and limitations
5.18.i
describe economic indicators, including
their uses and limitations
Economics 5.19.a compare monetary and fiscal policy 5.19.a compare monetary and fiscal policy
Economics 5.19.b
describe functions and definitions of
money
5.19.b
describe functions and definitions of
money

Economics 5.19.c explain the money creation process 5.19.c explain the money creation process
Economics 5.19.d
describe theories of the demand for and
supply of money
5.19.d
describe theories of the demand for and
supply of money
Economics 5.19.e describe the Fisher effect 5.19.e describe the Fisher effect
Economics 5.19.f
describe roles and objectives of central
banks
5.19.f
describe roles and objectives of central
banks
Economics 5.19.g
contrast the costs of expected and
unexpected inflation
5.19.g
contrast the costs of expected and
unexpected inflation
Economics 5.19.h
describe tools used to implement
monetary policy
5.19.h
describe tools used to implement
monetary policy
Economics 5.19.i
describe the monetary transmission
mechanism
New

www.passingscore.net 14
Economics 5.19.i
describe qualities of effective central
banks
5.19.j
describe qualities of effective central
banks
Economics 5.19.j
explain the relationships between
monetary policy and economic growth,
inflation, interest, and exchange rates
5.19.k
explain the relationships between
monetary policy and economic growth,
inflation, interest, and exchange rates
Economics 5.19.k
contrast the use of inflation, interest
rate, and exchange rate targeting by
central banks
5.19.l
contrast the use of inflation, interest
rate, and exchange rate targeting by
central banks
Economics 5.19.l
determine whether a monetary policy is
expansionary or contractionary
5.19.m
determine whether a monetary policy is
expansionary or contractionary
Economics 5.19.m describe limitations of monetary policy 5.19.n describe limitations of monetary policy

Economics 5.19.n
describe roles and objectives of fiscal
policy
5.19.o
describe roles and objectives of fiscal
policy
Economics 5.19.o
describe tools of fiscal policy, including
their advantages and disadvantages
5.19.p
describe tools of fiscal policy, including
their advantages and disadvantages
Economics 5.19.p
describe the arguments about whether
the size of a national debt relative to
GDP matters
5.19.q
describe the arguments about whether
the size of a national debt relative to
GDP matters
Economics 5.19.q
explain the implementation of fiscal
policy and difficulties of implementation
5.19.r
explain the implementation of fiscal
policy and difficulties of implementation
Economics 5.19.r
determine whether a fiscal policy is
expansionary or contractionary
5.19.s

determine whether a fiscal policy is
expansionary or contractionary
Economics 5.19.s
explain the interaction of monetary and
fiscal policy
5.19.t
explain the interaction of monetary and
fiscal policy
Economics 6.20.a
compare gross domestic product and
gross national product
6.20.a
compare gross domestic product and
gross national product
Economics 6.20.b
describe benefits and costs of
international trade
6.20.b
describe benefits and costs of
international trade
Economics 6.20.c
distinguish between comparative
advantage and absolute advantage
6.20.c
distinguish between comparative
advantage and absolute advantage
Economics 6.20.d
explain the Ricardian and
Heckscher–Ohlin models of trade and
the source(s) of comparative advantage

in each model
6.20.d
explain the Ricardian and
Heckscher–Ohlin models of trade and
the source(s) of comparative advantage
in each model
Economics 6.20.e
compare types of trade and capital
restrictions and their economic
implications
6.20.e
compare types of trade and capital
restrictions and their economic
implications
Economics 6.20.f
explain motivations for and advantages
of trading blocs, common markets, and
economic unions
6.20.f
explain motivations for and advantages
of trading blocs, common markets, and
economic unions
www.passingscore.net 15
Economics 6.20.g
describe common objectives of capital
restrictions imposed by governments
New
Economics 6.20.g
describe the balance of payments
accounts including their components

6.20.h
describe the balance of payments
accounts including their components
Economics 6.20.h
explain how decisions by consumers,
firms, and governments affect the
balance of payments
6.20.i
explain how decisions by consumers,
firms, and governments affect the
balance of payments
Economics 6.20.i
describe functions and objectives of the
international organizations that facilitate
trade, including the World Bank, the
International Monetary Fund, and the
World Trade Organization
6.20.j
describe functions and objectives of the
international organizations that facilitate
trade, including the World Bank, the
International Monetary Fund, and the
World Trade Organization
Economics 6.21.a
define an exchange rate, and
distinguish between nominal and real
exchange rates and spot and forward
exchange rates
6.21.a
define an exchange rate, and

distinguish between nominal and real
exchange rates and spot and forward
exchange rates
Economics 6.21.b
describe functions of and participants in
the foreign exchange market
6.21.b
describe functions of and participants in
the foreign exchange market
Economics 6.21.c
calculate and interpret the percentage
change in a currency relative to another
currency
6.21.c
calculate and interpret the percentage
change in a currency relative to another
currency
Economics 6.21.d
calculate and interpret currency cross-
rates
6.21.d
calculate and interpret currency cross-
rates
Economics 6.21.e
convert forward quotations expressed
on a points basis or in percentage terms
into an outright forward quotation
6.21.e
convert forward quotations expressed
on a points basis or in percentage terms

into an outright forward quotation
Economics 6.21.f
explain the arbitrage relationship
between spot rates, forward rates, and
interest rates
6.21.f
explain the arbitrage relationship
between spot rates, forward rates, and
interest rates
Economics 6.21.g
calculate and interpret a forward
discount or premium
6.21.g
calculate and interpret a forward
discount or premium
Economics 6.21.h
calculate and interpret the forward rate
consistent with the spot rate and the
interest rate in each currency
6.21.h
calculate and interpret the forward rate
consistent with the spot rate and the
interest rate in each currency
Economics 6.21.i describe exchange rate regimes 6.21.i describe exchange rate regimes
Economics 6.21.j
explain the effects of exchange rates on
countries’ international trade and capital
flows
6.21.j
explain the effects of exchange rates on

countries’ international trade and capital
flows
Financial
Reporting
7.22.a
describe the roles of financial reporting
and financial statement analysis
7.22.a
describe the roles of financial reporting
and financial statement analysis
www.passingscore.net 16
Financial
Reporting
7.22.b
describe the roles of the key financial
statements (statement of financial
position, statement of comprehensive
income, statement of changes in equity,
and statement of cash flows) in
evaluating a company’s performance
and financial position
7.22.b
describe the roles of the key financial
statements (statement of financial
position, statement of comprehensive
income, statement of changes in equity,
and statement of cash flows) in
evaluating a company’s performance
and financial position
Financial

Reporting
7.22.c
describe the importance of financial
statement notes and supplementary
information—including disclosures of
accounting policies, methods, and
estimates— and management’s
commentary
7.22.c
describe the importance of financial
statement notes and supplementary
information—including disclosures of
accounting policies, methods, and
estimates— and management’s
commentary
Financial
Reporting
7.22.d
describe the objective of audits of
financial statements, the types of audit
reports, and the importance of effective
internal controls
7.22.d
describe the objective of audits of
financial statements, the types of audit
reports, and the importance of effective
internal controls
Financial
Reporting
7.22.e

identify and describe information
sources that analysts use in financial
statement analysis besides annual
financial statements and supplementary
information
7.22.e
identify and describe information
sources that analysts use in financial
statement analysis besides annual
financial statements and supplementary
information
Financial
Reporting
7.22.f
describe the steps in the financial
statement analysis framework
7.22.f
describe the steps in the financial
statement analysis framework
Financial
Reporting
7.23.a
explain the relationship of financial
statement elements and accounts, and
classify accounts into the financial
statement elements
7.23.a
explain the relationship of financial
statement elements and accounts, and
classify accounts into the financial

statement elements
Financial
Reporting
7.23.b
explain the accounting equation in its
basic and expanded forms
7.23.b
explain the accounting equation in its
basic and expanded forms
Financial
Reporting
7.23.c
describe the process of recording
business transactions using an
accounting system based on the
accounting equation
7.23.c
describe the process of recording
business transactions using an
accounting system based on the
accounting equation
Financial
Reporting
7.23.d
describe the need for accruals and other
adjustments in preparing financial
statements
7.23.d
describe the need for accruals and other
adjustments in preparing financial

statements
Financial
Reporting
7.23.e
describe the relationships among the
income statement, balance sheet,
statement of cash flows, and statement
of owners’ equity
7.23.e
describe the relationships among the
income statement, balance sheet,
statement of cash flows, and statement
of owners’ equity
www.passingscore.net 17
Financial
Reporting
7.23.f
describe the flow of information in an
accounting system
7.23.f
describe the flow of information in an
accounting system
Financial
Reporting
7.23.g
describe the use of the results of the
accounting process in security analysis
7.23.g
describe the use of the results of the
accounting process in security analysis

Financial
Reporting
7.24.a
describe the objective of financial
statements and the importance of
financial reporting standards in security
analysis and valuation
7.24.a
describe the objective of financial
statements and the importance of
financial reporting standards in security
analysis and valuation
Financial
Reporting
7.24.b
describe roles and desirable attributes
of financial reporting standard-setting
bodies and regulatory authorities in
establishing and enforcing reporting
standards, and describe the role of the
International Organization of Securities
Commissions
7.24.b
describe roles and desirable attributes
of financial reporting standard-setting
bodies and regulatory authorities in
establishing and enforcing reporting
standards, and describe the role of the
International Organization of Securities
Commissions

Financial
Reporting
7.24.c
describe the status of global
convergence of accounting standards
and ongoing barriers to developing one
universally accepted set of financial
reporting standards
7.24.c
describe the status of global
convergence of accounting standards
and ongoing barriers to developing one
universally accepted set of financial
reporting standards
Financial
Reporting
7.24.d
describe the International Accounting
Standards Board’s conceptual
framework, including the objective and
qualitative characteristics of financial
statements, required reporting
elements, and constraints and
assumptions in preparing financial
statements
7.24.d
describe the International Accounting
Standards Board’s conceptual
framework, including the objective and
qualitative characteristics of financial

statements, required reporting
elements, and constraints and
assumptions in preparing financial
statements
Financial
Reporting
7.24.e
describe general requirements for
financial statements under IFRS
7.24.e
describe general requirements for
financial statements under International
Financial Reporting Standards (IFRS)
Wording
Change
Financial
Reporting
7.24.f
compare key concepts of financial
reporting standards under IFRS and
U.S. GAAP reporting systems
7.24.f
compare key concepts of financial
reporting standards under IFRS and US
generally accepted accounting principles
(US GAAP) reporting systems
Wording
Change
Financial
Reporting

7.24.g
identify characteristics of a coherent
financial reporting framework and the
barriers to creating such a framework
7.24.g
identify characteristics of a coherent
financial reporting framework and the
barriers to creating such a framework
www.passingscore.net 18
Financial
Reporting
7.24.h
describe implications for financial
analysis of differing financial reporting
systems and the importance of
monitoring developments in financial
reporting standards
7.24.h
describe implications for financial
analysis of differing financial reporting
systems and the importance of
monitoring developments in financial
reporting standards
Financial
Reporting
7.24.i
analyze company disclosures of
significant accounting policies
7.24.i
analyze company disclosures of

significant accounting policies
Financial
Reporting
8.25.a
describe the components of the income
statement and alternative presentation
formats of that statement
8.25.a
describe the components of the income
statement and alternative presentation
formats of that statement
Financial
Reporting
8.25.b
describe general principles of revenue
recognition and accrual accounting,
specific revenue recognition applications
(including accounting for long-term
contracts, installment sales, barter
transactions, gross and net reporting of
revenue), and implications of revenue
recognition principles for financial
analysis
8.25.b
describe general principles of revenue
recognition and accrual accounting,
specific revenue recognition applications
(including accounting for long-term
contracts, installment sales, barter
transactions, gross and net reporting of

revenue), and implications of revenue
recognition principles for financial
analysis
Financial
Reporting
8.25.c
calculate revenue given information that
might influence the choice of revenue
recognition method
8.25.c
calculate revenue given information that
might influence the choice of revenue
recognition method
Financial
Reporting
8.25.d
describe general principles of expense
recognition, specific expense recognition
applications, and implications of
expense recognition choices for financial
analysis
8.25.d
describe general principles of expense
recognition, specific expense recognition
applications, and implications of
expense recognition choices for financial
analysis
Financial
Reporting
8.25.e

describe the financial reporting
treatment and analysis of non-recurring
items (including discontinued
operations, extraordinary items,
unusual or infrequent items) and
changes in accounting standards
8.25.e
describe the financial reporting
treatment and analysis of non-recurring
items (including discontinued
operations, extraordinary items,
unusual or infrequent items) and
changes in accounting standards
Financial
Reporting
8.25.f
distinguish between the operating and
non-operating components of the
income statement
8.25.f
distinguish between the operating and
non-operating components of the
income statement
www.passingscore.net 19
Financial
Reporting
8.25.g
describe how earnings per share is
calculated and calculate and interpret a
company’s earnings per share (both

basic and diluted earnings per share)
for both simple and complex capital
structures
8.25.g
describe how earnings per share is
calculated and calculate and interpret a
company’s earnings per share (both
basic and diluted earnings per share)
for both simple and complex capital
structures
Financial
Reporting
8.25.h
distinguish between dilutive and
antidilutive securities, and describe the
implications of each for the earnings per
share calculation
8.25.h
distinguish between dilutive and
antidilutive securities, and describe the
implications of each for the earnings per
share calculation
Financial
Reporting
8.25.i
convert income statements to common-
size income statements
8.25.i
convert income statements to common-
size income statements

Financial
Reporting
8.25.j
evaluate a company’s financial
performance using common-size income
statements and financial ratios based on
the income statement
8.25.j
evaluate a company’s financial
performance using common-size income
statements and financial ratios based on
the income statement
Financial
Reporting
8.25.k
describe, calculate, and interpret
comprehensive income
8.25.k
describe, calculate, and interpret
comprehensive income
Financial
Reporting
8.25.l
describe other comprehensive income,
and identify major types of items
included in it
8.25.l
describe other comprehensive income,
and identify major types of items
included in it

Financial
Reporting
8.26.a
describe the elements of the balance
sheet: assets, liabilities, and equity
8.26.a
describe the elements of the balance
sheet: assets, liabilities, and equity
Financial
Reporting
8.26.b
describe uses and limitations of the
balance sheet in financial analysis
8.26.b
describe uses and limitations of the
balance sheet in financial analysis
Financial
Reporting
8.26.c
describe alternative formats of balance
sheet presentation
8.26.c
describe alternative formats of balance
sheet presentation
Financial
Reporting
8.26.d
distinguish between current and non-
current assets, and current and non-
current liabilities

8.26.d
distinguish between current and non-
current assets, and current and non-
current liabilities
Financial
Reporting
8.26.e
describe different types of assets and
liabilities and the measurement bases of
each
8.26.e
describe different types of assets and
liabilities and the measurement bases of
each
Financial
Reporting
8.26.f
describe the components of
shareholders’ equity
8.26.f
describe the components of
shareholders’ equity
Financial
Reporting
8.26.g
analyze balance sheets and statements
of changes in equity
8.26.g
convert balance sheets to common-size
balance sheets and interpret common-

size balance sheets
Separation
Financial
Reporting
8.26.h
convert balance sheets to common-size
balance sheets and interpret common-
size balance sheets
Separation
www.passingscore.net 20
Financial
Reporting
8.26.i
calculate and interpret liquidity and
solvency ratios
8.26.h
calculate and interpret liquidity and
solvency ratios
Financial
Reporting
8.27.a
compare cash flows from operating,
investing, and financing activities and
classify cash flow items as relating to
one of those three categories given a
description of the items
8.27.a
compare cash flows from operating,
investing, and financing activities and
classify cash flow items as relating to

one of those three categories given a
description of the items
Financial
Reporting
8.27.b
describe how non-cash investing and
financing activities are reported
8.27.b
describe how non-cash investing and
financing activities are reported
Financial
Reporting
8.27.c
contrast cash flow statements prepared
under International Financial Reporting
Standards (IFRS) and U.S. generally
accepted accounting principles (U.S.
GAAP)
8.27.c
contrast cash flow statements prepared
under International Financial Reporting
Standards (IFRS) and U.S. generally
accepted accounting principles (U.S.
GAAP)
Financial
Reporting
8.27.d
distinguish between the direct and
indirect methods of presenting cash
from operating activities and describe

arguments in favor of each method
8.27.d
distinguish between the direct and
indirect methods of presenting cash
from operating activities and describe
arguments in favor of each method
Financial
Reporting
8.27.e
describe how the cash flow statement is
linked to the income statement and the
balance sheet
8.27.e
describe how the cash flow statement is
linked to the income statement and the
balance sheet
Financial
Reporting
8.27.f
describe the steps in the preparation of
direct and indirect cash flow
statements, including how cash flows
can be computed using income
statement and balance sheet data
8.27.f
describe the steps in the preparation of
direct and indirect cash flow
statements, including how cash flows
can be computed using income
statement and balance sheet data

Financial
Reporting
8.27.g
convert cash flows from the indirect to
direct method
8.27.g
convert cash flows from the indirect to
direct method
Financial
Reporting
8.27.h
analyze and interpret both reported and
common-size cash flow statements
8.27.h
analyze and interpret both reported and
common-size cash flow statements
Financial
Reporting
8.27.i
calculate and interpret free cash flow to
the firm, free cash flow to equity, and
performance and coverage cash flow
ratios
8.27.i
calculate and interpret free cash flow to
the firm, free cash flow to equity, and
performance and coverage cash flow
ratios
Financial
Reporting

8.28.a
describe tools and techniques used in
financial analysis, including their uses
and limitations
8.28.a
describe tools and techniques used in
financial analysis, including their uses
and limitations
Financial
Reporting
8.28.b
classify, calculate, and interpret activity,
liquidity, solvency, profitability, and
valuation ratios
8.28.b
classify, calculate, and interpret activity,
liquidity, solvency, profitability, and
valuation ratios
www.passingscore.net 21
Financial
Reporting
8.28.c
describe relationships among ratios and
evaluate a company using ratio analysis
8.28.c
describe relationships among ratios and
evaluate a company using ratio analysis
Financial
Reporting
8.28.d

demonstrate the application of DuPont
analysis of return on equity, and
calculate and interpret effects of
changes in its components
8.28.d
demonstrate the application of DuPont
analysis of return on equity, and
calculate and interpret effects of
changes in its components
Financial
Reporting
8.28.e
calculate and interpret ratios used in
equity analysis and credit analysis
8.28.e
calculate and interpret ratios used in
equity analysis and credit analysis
Financial
Reporting
8.28.f
explain the requirements for segment
reporting, and calculate and interpret
segment ratios
8.28.f
explain the requirements for segment
reporting, and calculate and interpret
segment ratios
Financial
Reporting
8.28.g

describe how ratio analysis and other
techniques can be used to model and
forecast earnings
8.28.g
describe how ratio analysis and other
techniques can be used to model and
forecast earnings
Financial
Reporting
9.29.a
distinguish between costs included in
inventories and costs recognized as
expenses in the period in which they are
incurred
9.29.a
distinguish between costs included in
inventories and costs recognised as
expenses in the period in which they are
incurred
sp
Financial
Reporting
9.29.b
describe different inventory valuation
methods (cost formulas)
9.29.b
describe different inventory valuation
methods (cost formulas)
Financial
Reporting

9.29.c
calculate cost of sales and ending
inventory using different inventory
valuation methods and explain the
effect of the inventory valuation method
choice on gross profit
9.29.c
calculate cost of sales and ending
inventory using different inventory
valuation methods and explain the
effect of the inventory valuation method
choice on gross profit
Financial
Reporting
9.29.d
calculate and compare cost of sales,
gross profit, and ending inventory using
perpetual and periodic inventory
systems
9.29.d
calculate and compare cost of sales,
gross profit, and ending inventory using
perpetual and periodic inventory
systems
Financial
Reporting
9.29.e
compare cost of sales, ending inventory,
and gross profit using different
inventory valuation methods

9.29.e
compare cost of sales, ending inventory,
and gross profit using different
inventory valuation methods
Financial
Reporting
9.29.f
describe the measurement of inventory
at the lower of cost and net realisable
value
9.29.f
describe the measurement of inventory
at the lower of cost and net realisable
value
Financial
Reporting
9.29.g
describe the financial statement
presentation of and disclosures relating
to inventories
9.29.g
describe the financial statement
presentation of and disclosures relating
to inventories
Financial
Reporting
9.29.h
calculate and interpret ratios used to
evaluate inventory management
9.29.h

calculate and interpret ratios used to
evaluate inventory management
www.passingscore.net 22
Financial
Reporting
9.30.a
distinguish between costs that are
capitalized and costs that are expensed
in the period in which they are incurred
9.30.a
distinguish between costs that are
capitalized and costs that are expensed
in the period in which they are incurred
Financial
Reporting
9.30.b
compare the financial reporting of the
following types of intangible assets:
purchased, internally developed,
acquired in a business combination
9.30.b
compare the financial reporting of the
following types of intangible assets:
purchased, internally developed,
acquired in a business combination
Financial
Reporting
9.30.c
describe the different depreciation
methods for property, plant, and

equipment, the effect of the choice of
depreciation method on the financial
statements, and the effects of
assumptions concerning useful life and
residual value on depreciation expense
9.30.c
describe the different depreciation
methods for property, plant, and
equipment, the effect of the choice of
depreciation method on the financial
statements, and the effects of
assumptions concerning useful life and
residual value on depreciation expense
Financial
Reporting
9.30.d
calculate depreciation expense
9.30.d
calculate depreciation expense
Financial
Reporting
9.30.e
describe the different amortization
methods for intangible assets with finite
lives, the effect of the choice of
amortization method on the financial
statements, and the effects of
assumptions concerning useful life and
residual value on amortization expense
9.30.e

describe the different amortization
methods for intangible assets with finite
lives, the effect of the choice of
amortization method on the financial
statements, and the effects of
assumptions concerning useful life and
residual value on amortization expense
Financial
Reporting
9.30.f
calculate amortization expense
9.30.f
calculate amortization expense
Financial
Reporting
9.30.g
describe the revaluation model
9.30.g
describe the revaluation model
Financial
Reporting
9.30.h
explain the imparment of property,
plant, and equipment and intangible
assets
9.30.h
explain the impairment of property,
plant, and equipment and intangible
assets
Financial

Reporting
9.30.i
explain the derecognition of property,
plant, and equipment and intangible
assets
9.30.i
explain the derecognition of property,
plant, and equipment and intangible
assets
Financial
Reporting
9.30.j
describe the financial statement
presentation of and disclosures relating
to property, plant, and equipment and
intangible assets
9.30.j
describe the financial statement
presentation of and disclosures relating
to property, plant, and equipment and
intangible assets
Financial
Reporting
9.30.k
compare the financial reporting of
investment property with that of
property, plant, and equipment
9.30.k
compare the financial reporting of
investment property with that of

property, plant, and equipment
www.passingscore.net 23
Financial
Reporting
9.31.a
describe the differences between
accounting profit and taxable income,
and define key terms, including deferred
tax assets, deferred tax liabilities,
valuation allowance, taxes payable, and
income tax expense
9.31.a
describe the differences between
accounting profit and taxable income,
and define key terms, including deferred
tax assets, deferred tax liabilities,
valuation allowance, taxes payable, and
income tax expense
Financial
Reporting
9.31.b
explain how deferred tax liabilities and
assets are created and the factors that
determine how a company’s deferred
tax liabilities and assets should be
treated for the purposes of financial
analysis
9.31.b
explain how deferred tax liabilities and
assets are created and the factors that

determine how a company’s deferred
tax liabilities and assets should be
treated for the purposes of financial
analysis
Financial
Reporting
9.31.c
calculate the tax base of a company’s
assets and liabilities
9.31.c
calculate the tax base of a company’s
assets and liabilities
Financial
Reporting
9.31.d
calculate income tax expense, income
taxes payable, deferred tax assets, and
deferred tax liabilities, and calculate and
interpret the adjustment to the financial
statements related to a change in the
income tax rate
9.31.d
calculate income tax expense, income
taxes payable, deferred tax assets, and
deferred tax liabilities, and calculate and
interpret the adjustment to the financial
statements related to a change in the
income tax rate
Financial
Reporting

9.31.e
evaluate the impact of tax rate changes
on a company's financial statements
and ratios
9.31.e
evaluate the impact of tax rate changes
on a company’s financial statements
and ratios
Financial
Reporting
9.31.f
distinguish between temporary and
permanent differences in pre-tax
accounting income and taxable income
9.31.f
distinguish between temporary and
permanent differences in pre-tax
accounting income and taxable income
Financial
Reporting
9.31.g
describe the valuation allowance for
deferred tax assets—when it is required
and what impact it has on financial
statements
9.31.g
describe the valuation allowance for
deferred tax assets—when it is required
and what impact it has on financial
statements

Financial
Reporting
9.31.h
compare a company’s deferred tax
items
9.31.h
compare a company’s deferred tax
items
Financial
Reporting
9.31.i
analyze disclosures relating to deferred
tax items and the effective tax rate
reconciliation, and explain how
information included in these
disclosures affects a company’s financial
statements and financial ratios
9.31.i
analyze disclosures relating to deferred
tax items and the effective tax rate
reconciliation, and explain how
information included in these
disclosures affects a company’s financial
statements and financial ratios
www.passingscore.net 24
Financial
Reporting
9.31.j
identify the key provisions of and
differences between income tax

accounting under IFRS and U.S. GAAP
9.31.j
identify the key provisions of and
differences between income tax
accounting under International Financial
Reporting Standards (IFRS) and US
generally accepted accounting principles
(GAAP)
Wording
Change
Financial
Reporting
9.32.a
determine the initial recognition, initial
measurement and subsequent
measurement of bonds
9.32.a
determine the initial recognition, initial
measurement and subsequent
measurement of bonds
Financial
Reporting
9.32.b
describe the effective interest method
and calculate interest expense,
amortisation of bond
discounts/premiums, and interest
payments
9.32.b
describe the effective interest method

and calculate interest expense,
amortisation of bond
discounts/premiums, and interest
payments
Financial
Reporting
9.32.c
explain the derecognition of debt
9.32.c
explain the derecognition of debt
Financial
Reporting
9.32.d
describe the role of debt covenants in
protecting creditors
9.32.d
describe the role of debt covenants in
protecting creditors
Financial
Reporting
9.32.e
describe the financial statement
presentation of and disclosures relating
to debt
9.32.e
describe the financial statement
presentation of and disclosures relating
to debt
Financial
Reporting

9.32.f
explain the motivations for leasing
assets instead of purchasing them
9.32.f
explain motivations for leasing assets
instead of purchasing them
Wording
Change
Financial
Reporting
9.32.g
distinguish between a finance lease and
an operating lease from the
perspectives of the lessor and the
lessee
9.32.g
distinguish between a finance lease and
an operating lease from the
perspectives of the lessor and the
lessee
Financial
Reporting
9.32.h
determine the initial recognition, initial
measurement, and subsequent
measurement of finance leases
9.32.h
determine the initial recognition, initial
measurement, and subsequent
measurement of finance leases

Financial
Reporting
9.32.i
compare the disclosures relating to
finance and operating leases
9.32.i
compare the disclosures relating to
finance and operating leases
Financial
Reporting
9.32.j
describe defined contribution and
defined benefit pension plans
Removed
Financial
Reporting
9.32.k
compare the presentation and
disclosure of defined contribution and
defined benefit pension plans
9.32.j
compare the presentation and
disclosure of defined contribution and
defined benefit pension plans
Financial
Reporting
9.32.l
calculate and interpret leverage and
coverage ratios
9.32.k

calculate and interpret leverage and
coverage ratios
www.passingscore.net 25
Financial
Reporting
10.33.a
distinguish between financial reporting
quality and quality of reported results
(including quality of earnings, cash flow,
and balance sheet items)
New
Financial
Reporting
10.33.b
describe a spectrum for assessing
financial reporting quality
New
Financial
Reporting
10.33.c
distinguish between conservative and
aggressive accounting
New
Financial
Reporting
10.33.a
describe incentives that might induce a
company’s executives to manage
reported earnings, financial positions,
and cash flows

10.33.d
describe motivations that might cause
management to issue financial reports
that are not high quality
Wording
Change
Financial
Reporting
10.33.b
describe activities that will result in a
low quality of earnings
Separation
Financial
Reporting
10.33.c
describe the three conditions that are
generally present when fraud occurs,
including the risk factors related to
these conditions
10.33.e
describe conditions that are conducive
to issuing low-quality, or even
fraudulent, financial reports
Separation
Financial
Reporting
10.33.f
describe mechanisms that discipline
financial reporting quality and the
potential limitations of those

mechanisms
New
Financial
Reporting
10.33.g
describe presentation choices, including
non-GAAP measures, that could be used
to influence an analyst’s opinion
New
Financial
Reporting
10.33.h
describe accounting methods (choices
and estimates) that could be used to
manage earnings, cash flow, and
balance sheet items
New
Financial
Reporting
10.33.d
describe common accounting warning
signs and methods for detecting each
10.33.i
describe accounting warning signs and
methods for detecting manipulation of
information in financial reports
Wording
Change
Financial
Reporting

10.34.a
describe reasons for investors to assess
the quality of cash flow statements
Removed
Financial
Reporting
10.34.b
analyze and describe the following ways
to manage or manipulate the cash flow
statement: stretching out payables,
financing of payables, securitization of
receivables, issuing stock options, and
using stock buybacks
Removed