level 1 los 2014

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CFA Level 1 - LOS Changes 2013 - 2014

Topic LOS Level I 2013 LOS Level I - 2014 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.bstate the six components of the Code of Ethics and the seven Standards of Professional Conduct

1.1.bstate 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.ademonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity

1.2.ademonstrate 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.bexplain the construction and purpose of composites in performance reporting;

Ethics 1.3.c explain the requirements for verification 1.3.cexplain the requirements for verification.


Ethics 1.4.adescribe the key features of the GIPS standards and the fundamentals of compliance

1.4.adescribe 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 firms definition and historical performance record

1.4.b

describe the scope of the GIPS standards with respect to an investment firms 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.ddescribe the nine major sections of the GIPS standards.

Quantitative 2.5.ainterpret interest rates as required rates of return, discount rates, or opportunity costs

2.5.ainterpret 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.dsolve 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.fdemonstrate the use of a time line in modeling and solving time value of money problems

2.5.fdemonstrate the use of a time line in modeling and solving time value of money problems.

Quantitative 2.6.acalculate and interpret the net present value (NPV) and the internal rate of return (IRR) of an investment

2.6.acalculate and interpret the net present value (NPV) and the internal rate of return (IRR) of an investment;


Quantitative 2.6.bcontrast the NPV rule to the IRR rule, and identify problems associated with the IRR rule

2.6.bcontrast 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.ccalculate 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;

Quantitative 2.6.e

calculate and interpret the bank discount yield, holding period yield, effective annual yield, and money market yield for US 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.fconvert among holding period yields, money market yields, effective annual yields, and bond equivalent yields

2.6.fconvert 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.bdefine 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 set presented as a histogram or a frequency polygon

2.7.ddescribe 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.fcalculate 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;

Quantitative 2.7.h

calculate and interpret the proportion of observations falling within a specified number of standard deviations of the mean using Chebyshevs inequality

2.7.h

calculate and interpret the proportion of observations falling within a specified number of standard deviations of the mean using Chebyshevs inequality;

Quantitative 2.7.i calculate and interpret the coefficient of variation and the Sharpe ratio 2.7.icalculate and interpret the coefficient of variation and the Sharpe ratio;

Quantitative 2.7.jexplain skewness and the meaning of a positively or negatively skewed return distribution

2.7.jexplain skewness and the meaning of a positively or negatively skewed return distribution;

Quantitative 2.7.kdescribe the relative locations of the mean, median, and mode for a unimodal, nonsymmetrical distribution

2.7.kdescribe 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.lexplain measures of sample skewness and kurtosis;

Quantitative 2.7.mexplain the use of arithmetic and geometric means when analyzing investment returns

2.7.mcompare the use of arithmetic and geometric means when analyzing investment returns.

Wording Change

Quantitative 2.8.adefine a random variable, an outcome, an event, mutually exclusive events, and exhaustive events

2.8.adefine 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.cstate 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.ddistinguish between unconditional and conditional probabilities;

Quantitative 2.8.e explain the multiplication, addition, and total probability rules 2.8.eexplain 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.gdistinguish between dependent and independent events;

Quantitative 2.8.hcalculate and interpret an unconditional probability using the total probability rule

2.8.hcalculate 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.iexplain 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.jexplain the use of a tree diagram to represent an investment problem;

Quantitative 2.8.k calculate and interpret covariance and correlation 2.8.kcalculate 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.mcalculate and interpret covariance given a joint probability function;

Quantitative 2.8.n calculate and interpret an updated probability using Bayes formula 2.8.ncalculate 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 the factorial, combination, and permutation notations

2.8.oidentify the most appropriate method to solve a particular counting problem, and solve counting problems using factorial, combination, and permutation concepts.

Wording Change

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.bdescribe the set of possible outcomes of a specified discrete random variable;

Quantitative 3.9.c interpret a cumulative distribution function 3.9.cinterpret a cumulative distribution function;


Quantitative 3.9.dcalculate and interpret probabilities for a random variable, given its cumulative distribution function

3.9.dcalculate and interpret probabilities for a random variable, given its cumulative distribution function;

Quantitative 3.9.edefine a discrete uniform random variable, a Bernoulli random variable, and a binomial random variable

3.9.edefine a discrete uniform random variable, a Bernoulli random variable, and a binomial random variable;

Quantitative 3.9.fcalculate and interpret probabilities given the discrete uniform and the binomial distribution functions

3.9.fcalculate 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.gconstruct a binomial tree to describe stock 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 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.jexplain 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.ldetermine the probability that a normally distributed random variable lies inside a given interval

3.9.ldetermine 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 Roys safety-first criterion

3.9.n

define shortfall risk, calculate the safety-first ratio, and select an optimal portfolio using Roys 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.qexplain Monte Carlo simulation and describe its major applications and limitations

3.9.qexplain Monte Carlo simulation and describe its major applications and limitations;

Quantitative 3.9.r compare Monte Carlo simulation and historical simulation 3.9.rcompare Monte Carlo simulation and historical simulation.

Quantitative 3.10.a define simple random sampling and a sampling distribution 3.10.adefine simple random sampling and a sampling distribution;

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

Quantitative 3.10.c distinguish between simple random and stratified random sampling 3.10.cdistinguish between simple random and stratified random sampling;

Quantitative 3.10.d distinguish between time-series and cross-sectional data 3.10.ddistinguish between time-series and cross-sectional data;

Quantitative 3.10.e explain the central limit theorem and its importance 3.10.eexplain the central limit theorem and its importance;

Quantitative 3.10.f calculate and interpret the standard error of the sample mean 3.10.fcalculate and interpret the standard error of the sample mean;

Quantitative 3.10.g identify and describe desirable properties of an estimator 3.10.gidentify and describe desirable properties of an estimator;

Quantitative 3.10.hdistinguish between a point estimate and a confidence interval estimate of a population parameter

3.10.hdistinguish between a point estimate and a confidence interval estimate of a population parameter;

Quantitative 3.10.idescribe the properties of Students t-distribution and calculate and interpret its degrees of freedom

3.10.idescribe properties of Students 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, describe and interpret the choice of the null and alternative hypotheses, and distinguish between one-tailed and two-tailed tests of 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;

Separation

Quantitative 3.11.b distinguish between one-tailed and two-tailed tests of hypotheses; Separation

Quantitative 3.11.b

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.c

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.d distinguish between a statistical result and an economically meaningful result 3.11.edistinguish between a statistical result and an economically meaningful result;

Quantitative 3.11.e explain and interpret the p-value as it relates to hypothesis testing 3.11.fexplain and interpret the p-value as it relates to hypothesis testing;

Quantitative 3.11.f

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.g

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.h

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.i

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.jdistinguish between parametric and nonparametric tests and describe the 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.aexplain the principles of technical analysis, its applications, and its underlying assumptions

3.12.aexplain principles of technical analysis, its applications, and its underlying assumptions;

Quantitative 3.12.bdescribe the construction of and interpret different types of technical analysis charts

3.12.bdescribe the construction of different types of technical analysis charts and interpret them;

Wording Change

Quantitative 3.12.c explain the uses of trend, support, resistance lines, and change in polarity 3.12.cexplain uses of trend, support, resistance lines, and change in polarity;

Quantitative 3.12.d identify and interpret common chart patterns 3.12.d describe common chart patterns;Wording Change

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 the use of cycles by technical analysts 3.12.fexplain how technical analysts use cycles;

Wording Change

Quantitative 3.12.gdescribe the key tenets of Elliott Wave Theory and the importance of Fibonacci numbers

3.12.gdescribe the key tenets of Elliott Wave Theory and the importance of Fibonacci numbers;

Quantitative 3.12.hdescribe intermarket analysis as it relates to technical analysis and asset allocation

3.12.hdescribe 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.bexplain the principles of demand and supply;

Economics 4.13.cdescribe causes of shifts in and movements along demand and supply curves

4.13.cdescribe causes of shifts in and movements along demand and supply curves;


Economics 4.13.d

describe the process of aggregating demand and supply curves, the concept of equilibrium, and mechanisms by which markets achieve equilibrium

4.13.d describe the process of aggregating demand and supply curves;

Separation

Economics 4.13.edescribe the concept of equilibrium (partial and general), and mechanisms by which markets achieve equilibrium;

Separation

Economics 4.13.edistinguish between stable and unstable equilibria and identify instances of such equilibria

4.13.fdistinguish between stable and unstable equilibria, including price bubbles, and identify instances of such equilibria;

Wording Change

Economics 4.13.f

calculate and interpret individual and aggregate demand, 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.gcalculate and interpret the amount of excess demand or excess supply associated with a non-equilibrium price

4.13.hcalculate and interpret the amount of excess demand or excess supply associated with a non-equilibrium price;

Economics 4.13.hdescribe the 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.icalculate and interpret consumer surplus, producer surplus, and total surplus

4.13.jcalculate and interpret consumer surplus, producer surplus, and total surplus;

Economics 4.13.janalyze the effects of government regulation and intervention on demand and supply

4.13.kdescribe how government regulation and intervention affect demand and supply;

Wording Change

Economics 4.13.k

forecast the effect of the introduction and the removal of a market interference (eg, 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.l

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.adescribe consumer choice theory and utility theory;

Economics 4.14.bdescribe the use of indifference curves, opportunity sets, and budget constraints in decision making

4.14.bdescribe 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.ccalculate and interpret a budget constraint;

Economics 4.14.ddetermine a consumers equilibrium bundle of goods based on utility analysis

4.14.ddetermine a consumers equilibrium bundle of goods based on utility analysis;

Economics 4.14.e compare substitution and income effects 4.14.ecompare substitution and income effects;

Economics 4.14.fdistinguish between normal goods and inferior goods, and explain Giffen goods and Veblen goods in this context

4.14.fdistinguish between normal goods and inferior goods, and explain Giffen goods and Veblen goods in this context.

Economics 4.15.acalculate, interpret, and compare accounting profit, economic profit, normal profit, and economic rent

4.15.acalculate, 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.bcalculate and interpret and compare total, average, and marginal revenue;

Economics 4.15.c describe the firms factors of production 4.15.c describe a firms factors of production;

Economics 4.15.d calculate and interpret total, average, marginal, fixed, and variable costs 4.15.dcalculate and interpret total, average, marginal, fixed, and variable costs;

Economics 4.15.e determine and describe breakeven and shutdown points of production 4.15.edetermine and describe breakeven and shutdown points of production;

Economics 4.15.g describe approaches to determining the profit-maximizing level of output 4.15.fdescribe approaches to determining the profit-maximizing level of output;

Economics 4.15.f explain how economies of scale and diseconomies of scale affect costs 4.15.gdescribe how economies of scale and diseconomies of scale affect costs;

Wording Change

Economics 4.15.h distinguish between short-run and long-run profit maximization 4.15.hdistinguish 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.jcalculate 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.ldetermine the optimal combination of resources that minimizes cost.

Economics 4.16.adescribe the characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly

4.16.adescribe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly;


Economics 4.16.b

explain the 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 the firms supply function under each market structure 4.16.cdescribe a firms supply function under each market structure;

Economics 4.16.ddescribe and determine the optimal price and output for firms under each market structure

4.16.ddescribe 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.eexplain factors affecting long-run equilibrium under each market structure;

Economics 4.16.fdescribe pricing strategy under each market structure 4.16.f

describe pricing strategy under each market structure;

Economics 4.16.gdescribe the use and limitations of concentration measures in identifying market structure

4.16.gdescribe the use and limitations of concentration measures in identifying market structure;

Economics 4.16.h identify the type of market structure a firm is operating within 4.16.hidentify the type of market structure within which a firm operates.

Wording Change

Economics 5.17.acalculate and explain gross domestic product (GDP) using expenditure and income approaches

5.17.acalculate and explain gross domestic product (GDP) using expenditure and income approaches;

Economics 5.17.bcompare the sum-of-value-added and value-of-final-output methods of calculating GDP

5.17.bcompare 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.ccompare 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.dcompare GDP, national income, personal income, and personal disposable income;

Economics 5.17.eexplain the fundamental relationship among saving, investment, the fiscal balance, and the trade balance

5.17.eexplain the fundamental relationship among saving, investment, the fiscal balance, and the trade balance;

Economics 5.17.fexplain the IS and LM curves and how they combine to generate the aggregate demand curve

5.17.fexplain 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.gexplain the aggregate supply curve in the short run and long run;


Economics 5.17.hexplain the causes of movements along and shifts in aggregate demand and supply curves

5.17.hexplain 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.jexplain how a short run macroeconomic equilibrium may occur at a level above or below full employment

5.17.jexplain how a short-run macroeconomic equilibrium may occur at a level above or below full employment;

Economics 5.17.kanalyze the effect of combined changes in aggregate supply and demand on the economy

5.17.kanalyze the effect of combined changes in aggregate supply and demand on the economy;

Economics 5.17.l describe the sources, measurement, and sustainability of economic growth 5.17.ldescribe sources, measurement, and sustainability of economic growth;

Economics 5.17.mdescribe the production function approach to analyzing the sources of economic growth

5.17.mdescribe the production function approach to analyzing the sources of economic growth;

Economics 5.17.ndistinguish between input growth and growth of total factor productivity as components of economic growth

5.17.ndistinguish 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.adescribe the business cycle and its phases;

Economics 5.18.b

explain the typical patterns of resource use fluctuation, housing sector activity, and external trade sector activity, as an economy moves through the business cycle

5.18.bdescribe how resource use, housing sector activity, and external trade sector activity vary as an economy moves through the business cycle;

Wording Change

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.ddescribe types of unemployment and measures of unemployment;

Economics 5.18.e explain inflation, hyperinflation, disinflation, and deflation 5.18.eexplain inflation, hyperinflation, disinflation, and deflation;

Economics 5.18.f explain the construction of indices used to measure inflation 5.18.fexplain the construction of indices used to measure inflation;

Economics 5.18.g compare inflation measures, including their uses and limitations 5.18.gcompare inflation measures, including their uses and limitations;

Economics 5.18.h distinguish between cost-push and demand-pull inflation 5.18.hdistinguish between cost-push and demand-pull inflation;

Economics 5.18.i describe economic indicators, including their uses and limitations 5.18.idescribe economic indicators, including their uses and limitations;


Economics 5.18.jidentify the past, current, or expected future business cycle phase of an economy based on economic indicators

Removed

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.bdescribe 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.ddescribe 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 the roles and objectives of central banks 5.19.fdescribe roles and objectives of central banks;

Economics 5.19.g contrast the costs of expected and unexpected 5.19.gcontrast the costs of expected and unexpected inflation;

Economics 5.19.h describe the implementation of monetary policy 5.19.hdescribe tools used to implement monetary policy;

Wording Change

Economics 5.19.i describe the qualities of effective central banks 5.19.idescribe qualities of effective central banks;

Economics 5.19.jexplain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates

5.19.jexplain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates;

Economics 5.19.kcontrast the use of inflation, interest rate, and exchange rate targeting by central banks

5.19.kcontrast 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.ldetermine whether a monetary policy is expansionary or contractionary;

Economics 5.19.m describe the limitations of monetary policy 5.19.m describe limitations of monetary policy;

Economics 5.19.n describe the roles and objectives of fiscal policy 5.19.ndescribe roles and objectives of fiscal policy;

Economics 5.19.odescribe the tools of fiscal policy, including their advantages and disadvantages

5.19.o describe tools of fiscal policy, including their advantages and disadvantages;

Economics 5.19.pdescribe the arguments for and against being concerned with the size of a fiscal deficit (relative to GDP)

5.19.pdescribe the arguments about whether the size of a national debt relative to GDP matters;

Wording Change

Economics 5.19.qexplain the implementation of fiscal policy and the difficulties of implementation

5.19.qexplain the implementation of fiscal policy and difficulties of implementation;

Economics 5.19.r determine whether a fiscal policy is expansionary or contractionary 5.19.rdetermine whether a fiscal policy is expansionary or contractionary;


Economics 5.19.s explain the interaction of monetary and fiscal policy 5.19.sexplain the interaction of monetary and fiscal policy.

Economics 6.20.a compare gross domestic product and gross national product 6.20.acompare gross domestic product and gross national product;

Economics 6.20.b describe the benefits and costs of international trade 6.20.bdescribe benefits and costs of international trade;

Economics 6.20.c distinguish between comparative advantage and absolute advantage 6.20.cdistinguish between comparative advantage and absolute advantage;

Economics 6.20.d

explain the Ricardian and HeckscherOhlin models of trade and the source(s) of comparative advantage in each model

6.20.d

explain the Ricardian and HeckscherOhlin models of trade and the source(s) of comparative advantage in each model;

Economics 6.20.ecompare types of trade and capital restrictions and their economic implications

6.20.ecompare types of trade and capital restrictions and their economic implications;

Economics 6.20.fexplain motivations for and advantages of trading blocs, common markets, and economic unions

6.20.fexplain motivations for and advantages of trading blocs, common markets, and economic unions;

Economics 6.20.gdescribe the balance of payments accounts including their components 6.20.g

describe the balance of payments accounts including their components;

Economics 6.20.hexplain how decisions by consumers, firms, and governments affect the balance of payments

6.20.hexplain 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.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.

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.bdescribe functions of and participants in the foreign exchange market;

Economics 6.21.ccalculate and interpret the percentage change in a currency relative to another currency

6.21.ccalculate and interpret the percentage change in a currency relative to another currency;

Economics 6.21.d calculate and interpret currency cross-rates 6.21.dcalculate 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.fexplain the arbitrage relationship between spot rates, forward rates and interest rates

6.21.fexplain 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.gcalculate and interpret a forward discount or premium;

Economics 6.21.hcalculate and interpret the forward rate consistent with the spot rate and the interest rate in each currency

6.21.hcalculate 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;

Financial Reporting 6.21.j

explain the impact of exchange rates on countries international trade and capital flows

6.21.jexplain the effects of exchange rates on countries international trade and capital flows.

Wording Change

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;

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 companys 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 companys performance and financial position;

Financial Reporting 7.22.c

describe the importance of financial statement notes and supplementary informationincluding disclosures of accounting policies, methods, and estimates and managements commentary

7.22.c

describe the importance of financial statement notes and supplementary informationincluding disclosures of accounting policies, methods, and estimates and managements 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 explain 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;

Wording Change


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.


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;


explain the accounting equation in its basic and expanded forms 7.23.b

explain the accounting equation in its basic and expanded forms;


explain 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;

Wording Change


explain the need for accruals and other adjustments in preparing financial statements

7.23.ddescribe the need for accruals and other adjustments in preparing financial statements;

Wording Change


explain 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;

Wording Change


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

explain 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.

Wording Change


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;


describe the 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;


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;



describe the International Accounting Standards Boards 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 Boards conceptual framework, including the objective and qualitative characteristics of financial statements, required reporting elements, and constraints and assumptions in preparing financial statements;


describe general requirements for financial statements under IFRS 7.24.e

describe general requirements for financial statements under IFRS;


compare key concepts of financial reporting standards under IFRS and US GAAP reporting systems

7.24.fcompare key concepts of financial reporting standards under IFRS and U.S. GAAP reporting systems;


identify the 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 Reporting 7.24.h

explain the 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;

Wording Change

Financial Reporting 7.24.i

analyze company disclosures of significant accounting policies 7.24.i

analyze company disclosures of significant accounting policies.


describe the components of the income statement and alternative presentation formats of that statement

8.25.adescribe the components of the income statement and alternative presentation formats of that statement;


describe the 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 the 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;


calculate revenue given information that might influence the choice of revenue recognition method

8.25.ccalculate revenue given information that might influence the choice of revenue recognition method;



describe the general principles of expense recognition, specific expense recognition applications, and the 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;


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;


distinguish between the operating and non-operating components of the income statement

8.25.fdistinguish between the operating and non-operating components of the income statement;


describe how earnings per share is calculated and calculate and interpret a companys 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 companys earnings per share (both basic and diluted earnings per share) for both simple and complex capital structures;


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;


convert income statements to common-size income statements 8.25.i

convert income statements to common-size income statements;


evaluate a companys financial performance using common-size income statements and financial ratios based on the income statement

8.25.j

evaluate a companys 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 the major types of items included in it

8.25.ldescribe other comprehensive income, and identify major types of items included in it.


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;


describe the uses and limitations of the balance sheet in financial analysis 8.26.b

describe uses and limitations of the balance sheet in financial analysis;


describe alternative formats of balance sheet presentation 8.26.c

describe alternative formats of balance sheet presentation;



distinguish between current and non-current assets, and current and non-current liabilities

8.26.ddistinguish between current and non-current assets, and current and non-current liabilities;


describe different types of assets and liabilities and the measurement bases of each

8.26.edescribe different types of assets and liabilities and the measurement bases of each;


describe the components of shareholders equity 8.26.f

describe the components of shareholders equity;


analyze balance sheets and statements of changes in equity 8.26.g

analyze balance sheets and statements of changes in equity;


convert balance sheets to common-size balance sheets and interpret the common-size balance sheets

8.26.hconvert balance sheets to common-size balance sheets and interpret common-size balance sheets;


calculate and interpret liquidity and solvency ratios 8.26.i

calculate and interpret liquidity and solvency ratios.


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;


describe how non-cash investing and financing activities are reported 8.27.b

describe how non-cash investing and financing activities are reported;


contrast cash flow statements prepared under International Financial Reporting Standards (IFRS) and US generally accepted accounting principles (US 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);


distinguish between the direct and indirect methods of presenting cash from operating activities and describe the 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;


describe how the cash flow statement is linked to the income statement and the balance sheet

8.27.edescribe how the cash flow statement is linked to the income statement and the balance sheet;


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;


convert cash flows from the indirect to direct method 8.27.g

convert cash flows from the indirect to direct method;



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;


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.


describe tools and techniques used in financial analysis, including their uses and limitations

8.28.adescribe tools and techniques used in financial analysis, including their uses and limitations;


classify, calculate, and interpret activity, liquidity, solvency, profitability, and valuation ratios

8.28.bclassify, calculate, and interpret activity, liquidity, solvency, profitability, and valuation ratios;


describe the relationships among ratios and evaluate a company using ratio analysis

8.28.cdescribe relationships among ratios and evaluate a company using ratio analysis;


demonstrate the application of DuPont analysis of return on equity, and calculate and interpret the 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;


calculate and interpret ratios used in equity analysis, credit analysis, and segment analysis

8.28.e calculate and interpret ratios used in equity analysis and credit analysis;

Wording Change


explain the requirements for segment reporting, and calculate and interpret segment ratios;

NEW


describe how ratio analysis and other techniques can be used to model and forecast earnings

8.28.gdescribe how ratio analysis and other techniques can be used to model and forecast earnings.


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 recognized as expenses in the period in which they are incurred;


describe different inventory valuation methods (cost formulas) 9.29.b

describe different inventory valuation methods (cost formulas);


calculate cost of sales and ending inventory using different inventory valuation methods and explain the impact 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;

Wording Change



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;


compare and contrast cost of sales, ending inventory, and gross profit using different inventory valuation methods

9.29.ecompare cost of sales, ending inventory, and gross profit using different inventory valuation methods;

Wording Change


describe the measurement of inventory at the lower of cost and net realisable value

9.29.fdescribe the measurement of inventory at the lower of cost and net realisable value;


describe the financial statement presentation of and disclosures relating to inventories

9.29.gdescribe the financial statement presentation of and disclosures relating to inventories;


calculate and interpret ratios used to evaluate inventory management 9.29.h

calculate and interpret ratios used to evaluate inventory management.


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;


compare the financial reporting of the following classifications of intangible assets: purchased, internally developed, acquired in a business combination

9.30.bcompare the financial reporting of the following types of intangible assets: purchased, internally developed, acquired in a business combination;

Wording Change


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;


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;


explain the imparment of property, plant, and equipment, and intangible assets

9.30.hexplain the imparment of property, plant, and equipment and intangible assets;


explain the derecognition of property, plant, and equipment, and intangible assets

9.30.iexplain the derecognition of property, plant, and equipment and intangible assets;


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;


compare the financial reporting of investment property with that of property, plant, and equipment

9.30.kcompare the financial reporting of investment property with that of property, plant, and equipment.


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;


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 companys deferred tax liabilities and assets should be treated for the purposes of financial analysis;


determine the tax base of a company's assets and liabilities 9.31.c

calculate the tax base of a companys assets and liabilities;

Wording Change


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;


evaluate the impact of tax rate changes on a company's financial statements and ratios

9.31.eevaluate the impact of tax rate changes on a company's financial statements and ratios;



distinguish between temporary and permanent differences in pre-tax accounting income and taxable income

9.31.fdistinguish between temporary and permanent differences in pre-tax accounting income and taxable income;


describe the valuation allowance for deferred tax assetswhen it is required and what impact it has on financial statements

9.31.g

describe the valuation allowance for deferred tax assetswhen it is required and what impact it has on financial statements;


compare a company's deferred tax items 9.31.h

compare a companys deferred tax items;


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 companys financial statements and financial ratios;


identify the key provisions of and differences between income tax accounting under IFRS and US GAAP

9.31.jidentify the key provisions of and differences between income tax accounting under IFRS and U.S. GAAP.


determine the initial recognition, initial measurement and subsequent measurement of bonds

9.32.adetermine the initial recognition, initial measurement and subsequent measurement of bonds;


discuss 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;

Wording Change

Financial Reporting 9.32.c discuss the derecognition of debt 9.32.c explain the derecognition of debt;

Wording Change


explain the role of debt covenants in protecting creditors 9.32.d

describe the role of debt covenants in protecting creditors;

Wording Change


discuss the financial statement presentation of and disclosures relating to debt

9.32.edescribe the financial statement presentation of and disclosures relating to debt;

Wording Change


discuss the motivations for leasing assets instead of purchasing them 9.32.f

explain the motivations for leasing assets instead of purchasing them;

Wording Change


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;



determine the initial recognition, initial measurement, and subsequent measurement of finance leases

9.32.hdetermine the initial recognition, initial measurement, and subsequent measurement of finance leases;


compare the disclosures relating to finance and operating leases 9.32.i

compare the disclosures relating to finance and operating leases;


describe defined contribution and defined benefit pension plans 9.32.j

describe defined contribution and defined benefit pension plans


compare the presentation and disclosure of defined contribution and defined benefit pension plans

9.32.kcompare 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.l

calculate and interpret leverage and coverage ratios.


describe incentives that might induce a companys management to overreport or underreport earnings

10.33.a

describe incentives that might induce a companys executives to manage reported earnings, financial positions, and cash flows;

Wording Change


describe activities that will result in a low quality of earnings 10.33.b

describe activities that will result in a low quality of earnings;


describe the three conditions that are generally present when fraud occurs, including the risk factors related to these conditions

10.33.c

describe the three conditions that are generally present when fraud occurs, including the risk factors related to these conditions;


describe common accounting warning signs and methods for detecting each 10.33.d

describe common accounting warning signs and methods for detecting each.


describe reasons for investors to assess the quality of cash flow statements; NEW


analyze and describe the following ways to manipulate the cash flow statement: stretching out payables financing of payables securitization of receivables and using stock buybacks to offset dilution of earnings

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.

Wording Change


evaluate a companys past financial performance and explain how a companys strategy is reflected in past financial performance

10.35.a

evaluate a companys past financial performance and explain how a companys strategy is reflected in past financial performance;


prepare a basic projection of a companys future net income and cash flow

10.35.b forecast a companys future net income and cash flow;

Wording Change



describe the role of financial statement analysis in assessing the credit quality of a potential debt investment

10.35.cdescribe the role of financial statement analysis in assessing the credit quality of a potential debt investment;

Corporate Finance 10.35.d

describe the use of financial statement analysis in screening for potential equity investments

10.35.ddescribe the use of financial statement analysis in screening for potential equity investments;

Corporate Finance 10.35.e

determine and justify appropriate analyst adjustments to a companys financial statements to facilitate comparison with another company

10.35.e

explain appropriate analyst adjustments to a companys financial statements to facilitate comparison with another company.

Wording Change

Corporate Finance 11.36.a

describe the capital budgeting process, including the typical steps of the process, and distinguish among the various categories of capital projects

11.36.a

describe the capital budgeting process, including the typical steps of the process, and distinguish among the various categories of capital projects;

Corporate Finance 11.36.b

describe the basic principles of capital budgeting, including cash flow estimation

11.36.bdescribe the basic principles of capital budgeting, including cash flow estimation;

Corporate Finance 11.36.c

explain how the evaluation and selection of capital projects is affected by mutually exclusive projects, project sequencing, and capital rationing

11.36.c

explain how the evaluation and selection of capital projects is affected by mutually exclusive projects, project sequencing, and capital rationing;


calculate and interpret the results using each of the following methods to evaluate a single capital project: net present value (NPV), internal rate of return (IRR), payback period, discounted payback period, and profitability index (PI)

11.36.d

calculate and interpret the results using each of the following methods to evaluate a single capital project: net present value (NPV), internal rate of return (IRR), payback period, discounted payback period, and profitability index (PI);


explain the NPV profile, compare the NPV and IRR methods when evaluating independent and mutually exclusive projects, and describe the problems associated with each of the evaluation methods

11.36.e

explain the NPV profile, compare the NPV and IRR methods when evaluating independent and mutually exclusive projects, and describe the problems associated with each of the evaluation methods;

Corporate Finance 11.36.f

describe and account for the relative popularity of the various capital budgeting methods and explain the relation between NPV and company value and stock price

Removed


Corporate Finance 11.36.g

describe the expected relations among an investments NPV, company value, and share price

11.36.fdescribe expected relations among an investments NPV, company value, and share price.


calculate and interpret the weighted average cost of capital (WACC) of a company

11.37.acalculate and interpret the weighted average cost of capital (WACC) of a company;


describe how taxes affect the cost of capital from different capital sources 11.37.b

describe how taxes affect the cost of capital from different capital sources;


explain alternative methods of calculating the weights used in the WACC, including the use of the companys target capital structure

11.37.c

explain alternative methods of calculating the weights used in the WACC, including the use of the companys target capital structure;


explain how the marginal cost of capital and the investment opportunity schedule are used to determine the optimal capital budget

11.37.d

explain how the marginal cost of capital and the investment opportunity schedule are used to determine the optimal capital budget;


explain the marginal cost of capitals role in determining the net present value of a project

11.37.eexplain the marginal cost of capitals role in determining the net present value of a project;


calculate and interpret the cost of fixed rate debt capital using the yield-to-maturity approach and the debt-rating approach

11.37.f calculate and interpret the cost of debt capital using the yield-to-maturity approach and the debt-rating approach;

Wording Change


calculate and interpret the cost of noncallable, nonconvertible preferred stock

11.37.gcalculate and interpret the cost of noncallable, nonconvertible preferred stock;

Corporate Finance 11.37.h

calculate and interpret the cost of equity capital using the capital asset pricing model approach, the dividend discount model approach, and the bond-yield-plus risk-premium approach

11.37.h

calculate and interpret the cost of equity capital using the capital asset pricing model approach, the dividend discount model approach, and the bond-yield-plus risk-premium approach;

Corporate Finance 11.37.i

calculate and interpret the beta and cost of capital for a project 11.37.i

calculate and interpret the beta and cost of capital for a project;

Corporate Finance 11.37.j

explain the country risk premium in the estimation of the cost of equity for a company located in a developing market

11.37.j describe uses of country risk premiums in estimating the cost of equity;

Wording Change


Corporate Finance 11.37.k

describe the marginal cost of capital schedule, explain why it may be upward-sloping with respect to additional capital, and calculate and interpret its break-points

11.37.k

describe the marginal cost of capital schedule, explain why it may be upward-sloping with respect to additional capital, and calculate and interpret its break-points;

Corporate Finance 11.37.l

explain and demonstrate the correct treatment of flotation costs 11.37.l

explain and demonstrate the correct treatment of flotation costs.


define and explain leverage, business risk, sales risk, operating risk, and financial risk, and classify a risk, given a description

11.38.a

define and explain leverage, business risk, sales risk, operating risk, and financial risk, and classify a risk, given a description;


calculate and interpret the degree of operating leverage, the degree of financial leverage, and the degree of total leverage

11.38.b

calculate and interpret the degree of operating leverage, the degree of financial leverage, and the degree of total leverage;


describe the effect of financial leverage on a companys net income and return on equity

11.38.cdescribe the effect of financial leverage on a companys net income and return on equity;


calculate the breakeven quantity of sales and determine the company's net income at various sales levels

11.38.dcalculate the breakeven quantity of sales and determine the company's net income at various sales levels;


calculate and interpret the operating breakeven quantity of sales 11.38.e

calculate and interpret the operating breakeven quantity of sales.


describe regular cash dividends, extra dividends, stock dividends, stock splits, and reverse stock splits, including their expected effect on a shareholders wealth and a companys financial ratios

11.39.a

describe regular cash dividends, extra dividends, stock dividends, stock splits, and reverse stock splits, including their expected effect on shareholders wealth and a companys financial ratios;


describe dividend payment chronology, including the significance of declaration, holder-of-record, ex-dividend, and payment dates

11.39.b

describe dividend payment chronology, including the significance of declaration, holder-of-record, ex-dividend, and payment dates;

Corporate Finance 11.39.c compare share repurchase methods 11.39.c compare share repurchase methods;


calculate and compare the effects of a share repurchase on earnings per share when 1) the repurchase is financed with the companys excess cash and 2) the company uses funded debt to finance the repurchase

11.39.d

calculate and compare the effect of a share repurchase on earnings per share when 1) the repurchase is financed with the companys excess cash and 2) the company uses debt to finance the repurchase;

Wording Change



calculate the effect of a share repurchase on book value per share 11.39.e

calculate the effect of a share repurchase on book value per share;


explain why a cash dividend and a share repurchase of the same amount are equivalent in terms of the effect on shareholders wealth, all else being equal

11.39.f

explain why a cash dividend and a share repurchase of the same amount are equivalent in terms of the effect on shareholders wealth, all else being equal.


describe primary and secondary sources of liquidity and factors that influence a companys liquidity position

11.40.adescribe primary and secondary sources of liquidity and factors that influence a companys liquidity position;

Corporate Finance 11.40.b compare a companys liquidity measures with those of peer companies

11.40.bcompare a companys liquidity measures with those of peer companies;


evaluate working capital effectiveness of a company based on its operating and cash conversion cycles, and compare the companys effectiveness with that of peer companies

11.40.c

evaluate working capital effectiveness of a company based on its operating and cash conversion cycles, and compare the companys effectiveness with that of peer companies;


explain the effect of different types of cash flows on a companys net daily cash position

11.40.ddescribe how different types of cash flows affect a companys net daily cash position;

Wording Change


calculate and interpret comparable yields on various securities, compare portfolio returns against a standard benchmark, and evaluate a companys short-term investment policy guidelines

11.40.e

calculate and interpret comparable yields on various securities, compare portfolio returns against a standard benchmark, and evaluate a companys short-term investment policy guidelines;


evaluate a companys management of accounts receivable, inventory, and accounts payable over time and compared to peer companies

11.40.f

evaluate a companys management of accounts receivable, inventory, and accounts payable over time and compared to peer companies;


evaluate the choices of short-term funding available to a company and recommend a financing method

11.40.gevaluate the choices of short-term funding available to a company and recommend a financing method.

Corporate Finance 11.41.a define corporate governance 11.41.a define corporate governance;



describe practices related to board and committee independence, experience, compensation, external consultants, and frequency of elections, and determine whether they are supportive of shareowner protection

11.41.b

describe practices related to board and committee independence, experience, compensation, external consultants, and frequency of elections, and determine whether they are supportive of shareowner protection;


describe board independence and explain the importance of independent board members in corporate governance

11.41.c

describe board independence and explain the importance of independent board members in corporate governance;


identify factors that an analyst should consider when evaluating the qualifications of board members

11.41.didentify factors that an analyst should consider when evaluating the qualifications of board members;


describe the responsibilities of the audit, compensation, and nominations committees and id

level 1 los 2014

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