cfa level 1 los 2016

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Finance or Accounting Questions? Go to passingscoreforum.com 1

CFA Level 1 - LOS Changes 2015 - 2016

Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 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


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 thatconforms to the Code and Standards

and conduct that violates the Code and

Standards

1.2.b

distinguish between conduct thatconforms 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



1.2.c

recommend practices and procedures

designed to prevent violations of the



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.bexplain the construction and purpose of

composites in performance reporting1.3.b

explain the construction and purpose of

composites in performance reporting

Ethics 1.3.cexplain the requirements for

verification1.3.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

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

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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.ddescribe the nine major sections of the

GIPS standards1.4.d

describe the nine major sections of the

GIPS standards

Quantitative 2.5.ainterpret interest rates as requiredrates of return, discount rates, or

opportunity costs

2.5.ainterpret interest rates as required ratesof 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 presentvalue (NPV) and the internal rate of

return (IRR) of an investment

2.6.a calculate and interpret the net presentvalue (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.ccalculate and interpret a holding period

return (total return)2.6.c

calculate and interpret a holding period

return (total return)

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

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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 descriptivestatistics and inferential statistics,

between a population and a sample,

and among the types of measurement

scales

2.7.a

distinguish between descriptivestatistics and inferential statistics,

between a population and a sample,

and among the types of measurement

scales

Quantitative 2.7.bdefine a parameter, a sample statistic,

and a frequency distribution2.7.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.ddescribe the properties of a data setpresented as a histogram or a

frequency polygon

2.7.ddescribe the properties of a data setpresented 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 percentiles2.7.f

calculate and interpret quartiles,

quintiles, deciles, and percentiles

Quantitative 2.7.gcalculate and interpret 1) a range and amean absolute deviation and 2) the

variance and standard deviation of a

population and of a sample

2.7.gcalculate and interpret 1) a range and amean absolute deviation and 2) the

variance and standard deviation of a

population and of a sample

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.icalculate and interpret the coefficient of

variation and the Sharpe ratio2.7.i

calculate and interpret the coefficient of

variation and the Sharpe ratio

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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.lexplain measures of sample skewness

and kurtosis2.7.l

explain measures of sample skewness

and kurtosis

Quantitative 2.7.mcompare the use of arithmetic andgeometric means when analyzing

investment returns

2.7.mcompare the use of arithmetic andgeometric 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 interms of odds for and against the event

2.8.c state the probability of an event interms of odds for and against the event

Quantitative 2.8.ddistinguish between unconditional and

conditional probabilities2.8.d

distinguish between unconditional and

conditional probabilities

Quantitative 2.8.eexplain the multiplication, addition, and

total probability rules2.8.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 ofany 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 ofany number of independent events

Quantitative 2.8.gdistinguish between dependent and

independent events2.8.g

distinguish between dependent and

independent events

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.iexplain the use of conditional

expectation in investment applications2.8.i

explain the use of conditional

expectation in investment applications

Quantitative 2.8.jexplain the use of a tree diagram to

represent an investment problem2.8.j

explain the use of a tree diagram to

represent an investment problem

Quantitative 2.8.kcalculate and interpret covariance and

correlation 2.8.kcalculate and interpret covariance and

correlation

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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.mcalculate and interpret covariance given

a joint probability function2.8.m

calculate and interpret covariance given

a joint probability function

Quantitative 2.8.ncalculate and interpret an updated

probability using Bayes’ formula2.8.n

calculate and interpret an updated

probability using Bayes’ formula

Quantitative 2.8.o

identify the most appropriate methodto 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.bdescribe the set of possible outcomes

of a specified discrete random variable3.9.b

describe the set of possible outcomes of

a specified discrete random variable

Quantitative 3.9.c interpret a cumulative distributionfunction

3.9.c interpret a cumulative distributionfunction

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 describestock price movement 3.9.g construct a binomial tree to describestock price movement

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


probabilities, given a continuous

uniform distribution

Quantitative 3.9.jexplain the key properties of the

normal distribution3.9.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

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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 safetyfirst 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 ofreturn, 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 ofreturn, given a specific holding period

return

Quantitative 3.9.qexplain Monte Carlo simulation and

describe its applications and limitations3.9.q

explain Monte Carlo simulation and

describe its applications and limitations

Quantitative 3.9.rcompare Monte Carlo simulation and

historical simulation3.9.r

compare Monte Carlo simulation and

historical simulation

Quantitative 3.10.adefine simple random sampling and a

sampling distribution3.10.a

define simple random sampling and a

sampling distribution

Quantitative 3.10.b explain sampling error 3.10.b explain sampling error

Quantitative 3.10.cdistinguish between simple random and

stratified random sampling

3.10.cdistinguish between simple random and

stratified random samplingQuantitative 3.10.d

distinguish between time-series and

cross-sectional data3.10.d

distinguish between time-series and

cross-sectional data

Quantitative 3.10.eexplain the central limit theorem and

its importance3.10.e

explain the central limit theorem and its

importance

Quantitative 3.10.f calculate and interpret the standard

error of the sample mean3.10.f

calculate and interpret the standard

error of the sample mean

Quantitative 3.10.gidentify and describe desirable

properties of an estimator3.10.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

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Quantitative 3.10.i

describe properties of Student’s t-


its degrees of freedom

3.10.i

describe properties of Student’s t-


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.bdistinguish between one-tailed and two-

tailed tests of hypotheses

3.11.bdistinguish 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

Quantitative 3.11.edistinguish between a statistical result

and an economically meaningful result3.11.e

distinguish between a statistical result

and an economically meaningful result

Quantitative 3.11.f explain and interpret the p-value as itrelates to hypothesis testing 3.11.f explain and interpret the p-value as itrelates 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



hypothesis test concerning the

population mean of both large and small

samples when the population is

normally or approximately normally

distributed and the variance is 1) known

or 2) unknown

Wording

Change

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Quantitative 3.11.h



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



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 statisticand interpret the results for a

hypothesis test concerning the mean

difference of two normally distributed

populations

3.11.i

identify the appropriate test statisticand interpret the results for a

hypothesis test concerning the mean

difference of two normally distributed

populations

Quantitative 3.11.j



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 independentrandom samples

3.11.j



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 independentrandom 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

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.cexplain uses of trend, support,

resistance lines, and change in polarity3.12.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

cycles3.12.f

explain how technical analysts use

cycles

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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.bexplain the principles of demand and

supply4.13.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.ddescribe the process of aggregating

demand and supply curves4.13.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 suchequilibria

4.13.f distinguish between stable and unstable

equilibria, including price bubbles, andidentify 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

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

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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.adescribe consumer choice theory and

utility theory4.14.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.ccalculate and interpret a budget

constraint4.14.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.ecompare substitution and income

effects4.14.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.acalculate, interpret, and compareaccounting profit, economic profit,

normal profit, and economic rent

4.15.acalculate, interpret, and compareaccounting profit, economic profit,

normal profit, and economic rent

Economics 4.15.bcalculate and interpret and compare

total, average, and marginal revenue4.15.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.dcalculate and interpret total, average,

marginal, fixed, and variable costs4.15.d

calculate and interpret total, average,

marginal, fixed, and variable costs

Economics 4.15.edetermine and describe breakeven and

shutdown points of production4.15.e

determine and describe breakeven and

shutdown points of production

Economics 4.15.f describe approaches to determining the

profit-maximizing level of output4.15.f

describe approaches to determining the

profit-maximizing level of output

Economics 4.15.gdescribe how economies of scale and

diseconomies of scale affect costs4.15.g

describe how economies of scale and

diseconomies of scale affect costs

Economics 4.15.hdistinguish between short-run and long-

run profit maximization4.15.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.jcalculate and interpret total, marginal,

and average product of labor4.15.j

calculate and interpret total, marginal,

and average product of labor

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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.ldetermine the optimal combination of

resources that minimizes cost4.15.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.cdescribe a firm’s supply function under

each market structure4.16.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 marketstructure

4.16.e explain factors affecting long-runequilibrium under each market structure

Economics 4.16.f describe pricing strategy under each

market structure4.16.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.hidentify the type of market structure

within which a firm operates4.16.h

identify the type of market structure

within which a firm operates

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

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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.gexplain the aggregate supply curve in

the short run and long run5.17.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 aggregatedemand and aggregate supply cause

short-run changes in the economy and

the business cycle

5.17.i

describe how fluctuations in aggregatedemand 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

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

Economics 5.17.k

explain how a short-run

macroeconomic equilibrium may occur

at a level above or below fullemployment

5.17.kexplain how a short-run macroeconomic

equilibrium may occur at a level aboveor below full employment

Economics 5.17.l

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.mdescribe sources, measurement, and

sustainability of economic growth5.17.m

describe sources, measurement, and

sustainability of economic growth

Economics 5.17.n

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.o

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.adescribe the business cycle and its

phases5.18.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.ddescribe types of unemployment and

measures of unemployment5.18.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

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Economics 5.18.f explain the construction of indices used

to measure inflation5.18.f

explain the construction of indices used

to measure inflation

Economics 5.18.gcompare inflation measures, including

their uses and limitations5.18.g

compare inflation measures, including

their uses and limitations

Economics 5.18.hdistinguish between cost-push and

demand-pull inflation5.18.h

distinguish between cost-push and

demand-pull inflation

Economics 5.18.idescribe economic indicators, including

their uses and limitations5.18.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.bdescribe functions and definitions of

money5.19.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.ddescribe theories of the demand for

and supply of money5.19.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

banks5.19.f

describe roles and objectives of central

banks

Economics 5.19.gcontrast the costs of expected and

unexpected inflation5.19.g

contrast the costs of expected and

unexpected inflation

Economics 5.19.h describe tools used to implementmonetary policy 5.19.h describe tools used to implementmonetary policy

Economics 5.19.idescribe the monetary transmission

mechanism5.19.i

describe the monetary transmission

mechanism

Economics 5.19.jdescribe qualities of effective central

banks5.19.j

describe qualities of effective central

banks

Economics 5.19.k

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.l

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.mdetermine whether a monetary policy is

expansionary or contractionary5.19.m

determine whether a monetary policy is

expansionary or contractionary

Economics 5.19.n describe limitations of monetary policy 5.19.n describe limitations of monetary policy

Economics 5.19.odescribe roles and objectives of fiscal

policy5.19.o

describe roles and objectives of fiscal

policy

Economics 5.19.pdescribe tools of fiscal policy, including

their advantages and disadvantages5.19.p

describe tools of fiscal policy, including

their advantages and disadvantages

Economics 5.19.q

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

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Economics 5.19.r 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.sdetermine whether a fiscal policy is

expansionary or contractionary5.19.s

determine whether a fiscal policy is

expansionary or contractionary

Economics 5.19.texplain the interaction of monetary and

fiscal policy5.19.t

explain the interaction of monetary and

fiscal policy

Economics 6.20.acompare gross domestic product and

gross national product

6.20.acompare gross domestic product and

gross national product

Economics 6.20.bdescribe benefits and costs of

international trade6.20.b

describe benefits and costs of

international trade

Economics 6.20.cdistinguish between comparative

advantage and absolute advantage6.20.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

Economics 6.20.gdescribe common objectives of capital

restrictions imposed by governments6.20.g

describe common objectives of capital

restrictions imposed by governments

Economics 6.20.hdescribe the balance of payments

accounts including their components6.20.h

describe the balance of payments

accounts including their components

Economics 6.20.i

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.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

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.bdescribe functions of and participants in

the foreign exchange market6.21.b

describe functions of and participants in

the foreign exchange market

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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.dcalculate and interpret currency cross-

rates6.21.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.econvert 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.gcalculate and interpret a forward

discount or premium6.21.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 andcapital flows 6.21.j

explain the effects of exchange rates on

countries’ international trade and capitalflows

Financial

Reporting7.22.a

describe the roles of financial reporting

and financial statement analysis7.22.a

describe the roles of financial reporting

and financial statement analysis

Financial

Reporting7.22.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 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

Wording

Change

Financial

Reporting7.22.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

Reporting7.22.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

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Financial

Reporting7.22.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

Reporting7.22.f

describe the steps in the financial

statement analysis framework7.22.f

describe the steps in the financial

statement analysis framework

Financial

Reporting 7.23.a

describe how business activities are

classified for financial reportingpurposes

New

Financial

Reporting7.23.a

explain the relationship of financial

statement elements and accounts, and

classify accounts into the financial

statement elements

7.23.b

explain the relationship of financial

statement elements and accounts, and

classify accounts into the financial

statement elements

Financial

Reporting7.23.b

explain the accounting equation in its

basic and expanded forms7.23.c

explain the accounting equation in its

basic and expanded forms

Financial

Reporting7.23.c

describe the process of recording

business transactions using an

accounting system based on the

accounting equation

7.23.d

describe the process of recording

business transactions using an

accounting system based on the

accounting equationFinancial

Reporting7.23.d

describe the need for accruals and

other adjustments in preparing

financial statements

7.23.e

describe the need for accruals and

valuation adjustments in preparing

financial statements

Wording

Change

Financial

Reporting7.23.e

describe the relationships among the

income statement, balance sheet,

statement of cash flows, and statement

of owners’ equity

7.23.f

describe the relationships among the

income statement, balance sheet,

statement of cash flows, and statement

of owners’ equity

Financial

Reporting7.23.f

describe the flow of information in an

accounting system7.23.g

describe the flow of information in an

accounting system

Financial

Reporting7.23.g

describe the use of the results of the

accounting process in security analysis7.23.h

describe the use of the results of the

accounting process in security analysis

Financial

Reporting7.24.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

Reporting7.24.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

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Financial

Reporting7.24.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

FinancialReporting

7.24.d

describe the International Accounting

Standards Board’s conceptual

framework, including the objective and

qualitative characteristics of financialstatements, 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 financialstatements, required reporting

elements, and constraints and

assumptions in preparing financial

statements

Financial

Reporting7.24.e

describe general requirements for

financial statements under

International Financial Reporting

Standards (IFRS)

7.24.edescribe general requirements for

financial statements under International

Financial Reporting Standards (IFRS)

Financial

Reporting 7.24.f

compare key concepts of financial

reporting standards under IFRS and USgenerally accepted accounting

principles (US GAAP) reporting systems

7.24.f

compare key concepts of financial

reporting standards under IFRS and USgenerally accepted accounting principles

(US GAAP) reporting systems

Financial

Reporting7.24.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

Financial

Reporting7.24.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.ianalyze company disclosures of

significant accounting policies 7.24.ianalyze company disclosures of

significant accounting policies

Financial

Reporting8.25.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

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Financial

Reporting8.25.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

analysisFinancial

Reporting8.25.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

Reporting8.25.d

describe key aspects of the converged

accounting standards issued by the

International Accounting Standards

Board and Financial Accounting

Standards Board in May 2014

New

Financial

Reporting 8.25.d

describe general principles of expense

recognition, specific expense

recognition applications, andimplications of expense recognition

choices for financial analysis

8.25.e

describe general principles of expense

recognition, specific expense recognition

applications, and implications ofexpense recognition choices for financial

analysis

Financial

Reporting8.25.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.f

describe the financial reporting

treatment and analysis of non-recurring

items (including discontinued

operations, extraordinary items,

unusual or infrequent items) and

changes in accounting policies

Wording

Change

Financial

Reporting8.25.f

distinguish between the operating and

non-operating components of the

income statement

8.25.g

distinguish between the operating and

non-operating components of the

income statement

Financial

Reporting8.25.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.h

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

Reporting8.25.h

distinguish between dilutive and

antidilutive securities, and describe the

implications of each for the earnings

per share calculation

8.25.i

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.j

convert income statements to common-

size income statements

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Financial

Reporting8.25.j

evaluate a company’s financial

performance using common-size

income statements and financial ratios

based on the income statement

8.25.k

evaluate a company’s financial

performance using common-size income

statements and financial ratios based on

the income statement

Financial

Reporting8.25.k

describe, calculate, and interpret

comprehensive income8.25.l

describe, calculate, and interpret

comprehensive income

Financial

Reporting8.25.l

describe other comprehensive income,

and identify major types of items

included in it

8.25.m

describe other comprehensive income,

and identify major types of items

included in itFinancial

Reporting8.26.a

describe the elements of the balance

sheet: assets, liabilities, and equity8.26.a

describe the elements of the balance

sheet: assets, liabilities, and equity

Financial

Reporting8.26.b

describe uses and limitations of the

balance sheet in financial analysis8.26.b

describe uses and limitations of the

balance sheet in financial analysis

Financial

Reporting8.26.c

describe alternative formats of balance

sheet presentation8.26.c

describe alternative formats of balance

sheet presentation

Financial

Reporting8.26.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 basesof each 8.26.e

describe different types of assets and

liabilities and the measurement bases ofeach

Financial

Reporting8.26.f

describe the components of

shareholders’ equity8.26.f

describe the components of

shareholders’ equity

Financial

Reporting8.26.g

convert balance sheets to common-size

balance sheets and interpret common-

size balance sheets

8.26.g

convert balance sheets to common-size

balance sheets and interpret common-

size balance sheets

Financial

Reporting8.26.h

calculate and interpret liquidity and

solvency ratios8.26.h

calculate and interpret liquidity and

solvency ratios

Financial

Reporting8.27.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

Reporting8.27.b

describe how non-cash investing and

financing activities are reported8.27.b

describe how non-cash investing and

financing activities are reported

Financial

Reporting8.27.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)

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Financial

Reporting8.27.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

Reporting8.27.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

FinancialReporting

8.27.f

describe the steps in the preparation of

direct and indirect cash flowstatements, 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 flowstatements, including how cash flows

can be computed using income

statement and balance sheet data

Financial

Reporting8.27.g

convert cash flows from the indirect to

direct method8.27.g

convert cash flows from the indirect to

direct method

Financial

Reporting8.27.h

analyze and interpret both reported

and common-size cash flow statements8.27.h

analyze and interpret both reported and

common-size cash flow statements

Financial

Reporting8.27.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

ratiosFinancial

Reporting8.28.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

Reporting8.28.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

Financial

Reporting8.28.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

Reporting8.28.e

calculate and interpret ratios used in

equity analysis and credit analysis8.28.e

calculate and interpret ratios used in

equity analysis and credit analysis

Financial

Reporting8.28.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

Reporting8.28.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

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Financial

Reporting9.29.a

distinguish between costs included in

inventories and costs recognised 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

Financial

Reporting9.29.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 theeffect of the inventory valuation

method choice on gross profit

Removed

Financial

Reporting9.29.d

calculate and compare cost of sales,

gross profit, and ending inventory using

perpetual and periodic inventory

systems

9.29.c

calculate and compare cost of sales,

gross profit, and ending inventory using

different inventory valuation methods

and using perpetual and periodic

inventory systems

Combined

Financial

Reporting9.29.e

compare cost of sales, ending

inventory, and gross profit using

different inventory valuation methods

Combined

Financial

Reporting9.29.d

calculate and explain how inflation and

deflation of inventory costs affect the

financial statements and ratios of

companies that use different inventory

valuation methods

New

Financial

Reporting9.29.e

explain LIFO reserve and LIFO

liquidation and their effects on financial

statements and ratios

New

Financial

Reporting9.29.f

convert a company’s reported financial

statements from LIFO to FIFO for

purposes of comparison

New

FinancialReporting

9.29.f

describe the measurement of inventory

at the lower of cost and net realisable

value

9.29.g

describe the measurement of inventory

at the lower of cost and net realisable

value

Financial

Reporting9.29.h

describe implications of valuing

inventory at net realisable value for

financial statements and ratios

New

Financial

Reporting9.29.g

describe the financial statement

presentation of and disclosures relating

to inventories

9.29.i



to inventories

Financial

Reporting9.29.j

explain issues that analysts should

consider when examining a company’s

inventory disclosures and other sources

of information

New

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Financial

Reporting9.29.h calculate and interpret ratios used to

evaluate inventory management

9.29.k

calculate and compare ratios of

companies, including companies that

use different inventory methods

Wording

Change

Financial

Reporting9.29.l

analyze and compare the financial

statements of companies, including

companies that use different inventory

methods

New

Financial

Reporting 9.30.a

distinguish between costs that are

capitalized and costs that are expensedin the period in which they are incurred

9.30.a

distinguish between costs that are

capitalised and costs that are expensedin the period in which they are incurred

sp

Financial

Reporting9.30.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

Reporting9.30.c

explain and evaluate how capitalising

versus expensing costs in the period in

which they are incurred affects financial


Financial

Reporting9.30.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.d describe the different depreciation

methods for property, plant, and

equipment and calculate depreciation

expense

Separation

Financial

Reporting9.30.d

calculate depreciation expense

9.30.e

describe how the choice of depreciation

method and assumptions concerning

useful life and residual value affect

depreciation expense, financial

statements, and ratios

Separation

Financial

Reporting9.30.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.f

describe the different amortisation

methods for intangible assets with finite

lives and calculate amortisation expense

Separation

Financial

Reporting9.30.g

describe how the choice of amortisation

method and assumptions concerning

useful life and residual value affect

amortisation expense, financial

statements, and ratios

Separation

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Financial

Reporting9.30.f

calculate amortization expense Removed

Financial

Reporting9.30.g

describe the revaluation model9.30.h

describe the revaluation model

Financial

Reporting9.30.h

explain the impairment of property,

plant, and equipment and intangible

assets

9.30.i

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 intangibleassets

9.30.j

explain the derecognition of property,

plant, and equipment and intangibleassets

Financial

Reporting9.30.k

explain and evaluate how impairment,

revaluation, and derecognition of

property, plant, and equipment and

intangible assets affect financial


New

Financial

Reporting9.30.j



to property, plant, and equipment and

intangible assets

9.30.l



to property, plant, and equipment and

intangible assets

Financial

Reporting9.30.m

analyze and interpret financial

statement disclosures regarding

property, plant, and equipment and

intangible assets

New

Financial

Reporting9.30.k

compare the financial reporting of

investment property with that of

property, plant, and equipment

9.30.n

compare the financial reporting of

investment property with that of

property, plant, and equipment

Financial

Reporting9.30.o

explain and evaluate how leasing rather

than purchasing assets affects financial


New

FinancialReporting

9.30.p

explain and evaluate how finance leases

and operating leases affect financial

statements and ratios from the

perspective of both the lessor and the

lessee

New

Financial

Reporting9.31.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

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Financial

Reporting9.31.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

Reporting9.31.c

calculate the tax base of a company’s

assets and liabilities9.31.c

calculate the tax base of a company’s

assets and liabilities

Financial

Reporting9.31.d

calculate income tax expense, incometaxes 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, incometaxes 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

Reporting9.31.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

Reporting9.31.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

Reporting9.31.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

Reporting9.31.h

explain recognition and measurement of

current and deferred tax items New

Financial

Reporting9.31.h

compare a company’s deferred tax

items Removed

FinancialReporting

9.31.i

analyze disclosures relating to deferred

tax items and the effective tax ratereconciliation, 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 ratereconciliation, and explain how

information included in these

disclosures affects a company’s financial

statements and financial ratios

Financial

Reporting9.31.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)

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)

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Financial

Reporting9.32.a

determine the initial recognition, initial

measurement and subsequent

measurement of bonds

9.32.a


measurement and subsequent

measurement of bonds

Financial

Reporting9.32.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

FinancialReporting 9.32.c explain the derecognition of debt 9.32.c explain the derecognition of debt

Financial

Reporting9.32.d

describe the role of debt covenants in

protecting creditors9.32.d

describe the role of debt covenants in

protecting creditors

Financial

Reporting9.32.e



to debt

9.32.e



to debt

Financial

Reporting9.32.f

explain motivations for leasing assets

instead of purchasing them9.32.f

explain motivations for leasing assets

instead of purchasing them

Financial

Reporting9.32.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

Reporting9.32.h


measurement, and subsequent

measurement of finance leases

9.32.h


measurement, and subsequent

measurement of finance leases

Financial

Reporting9.32.i

compare the disclosures relating to

finance and operating leases9.32.i

compare the disclosures relating to

finance and operating leases

Financial

Reporting9.32.j

compare the presentation and

disclosure of defined contribution and

defined benefit pension plans

cfa level 1 los 2016

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