1. Module 1 — Convergence Paragraph Lists Credit Losses as Mostly or Entirely Converged
Curriculum location: Comparison of IFRS with Alternative Financial Reporting Systems, IASB–FASB convergence paragraph, p. 27.
"new accounting standards have been mostly or entirely converged, resulting in increasing uniformity over time as major new standards have been adopted (e.g., revenue recognition, leasing, credit losses)."
The sentence uses credit losses as evidence that newer IFRS and US GAAP standards are mostly or entirely converged. FASB's account of the joint project states that credit-loss convergence was unachievable and that the boards issued distinct expected-credit-loss models. The later general warning about remaining differences does not withdraw the explicit credit-loss example. The principal revenue-recognition standards were substantially converged when issued, although later amendments created further differences; that does not make credit losses a converged example.
Correct reading: The principal revenue-recognition standards were substantially converged when issued, though later amendments created further differences; credit losses are not a converged example because IFRS 9 and CECL use distinct expected-credit-loss models. Assess convergence standard by standard rather than assuming that newer standards are uniform.
Treating IFRS 9 and CECL as interchangeable can lead a candidate to overlook framework-specific loss-recognition and measurement differences in issuer analysis.
2. Module 2 — Revenue Recognition Uses Risk and Reward Instead of Control
Curriculum location: Revenue Recognition, General Principles, p. 39.
"the company's financial records reflect revenue from the sale when the risk and reward of ownership is transferred"
The curriculum presents transfer of risks and rewards as the recognition trigger. On the next page, however, it correctly identifies transfer of control as the core principle of the converged revenue standard. Risks and rewards can help indicate whether control has transferred at a point in time, but they do not replace control as the governing test. The later correct statement exposes the contradiction; it does not withdraw the earlier categorical rule.
Correct reading: Recognize revenue when or as an entity satisfies a performance obligation by transferring control of a promised good or service to the customer. Transfer of significant risks and rewards is one possible indicator of control for point-in-time recognition, not the recognition principle itself.
A candidate who treats risk-and-reward transfer as the governing trigger may apply the wrong recognition test when control and delivery indicators do not align.
3. Module 2 — The Reversal Constraint Is Applied to All Revenue
Curriculum location: Revenue Recognition, Accounting Standards for Revenue Recognition, p. 40.
"Revenue should be recognized only when it is highly probable that it will not be subsequently reversed."
Curriculum location: Revenue Recognition, Accounting Standards for Revenue Recognition, following sentence, p. 40.
"If it is likely to be reversed, the seller will record a minimal amount of revenue upon sale and recognize a refund liability and “right to returned goods” asset on the balance sheet based on the carrying amount of inventory less costs of recovery."
The significant-reversal constraint applies when estimating variable consideration; it is not a universal prerequisite for recognizing every kind of revenue. The following discussion also moves directly to the distinct accounting model for sales with a right of return. Neither the nearby transaction-price paragraph nor the return discussion supplies the omitted scope, and combining the two rules can make a reader substitute them for satisfaction of a performance obligation.
Correct reading: When consideration is variable, include an amount in the transaction price only to the extent that it is highly probable that a significant cumulative revenue reversal will not occur. For a sale with a right of return, recognize revenue only for products expected not to be returned, together with a refund liability and an asset for the right to recover returned products.
This distinction prevents a candidate from using the variable-consideration constraint as a blanket revenue-recognition test or applying return accounting to unrelated uncertainty.
4. Module 2 — Deferred Financing Cost Amortization Is Mislabeled as Depreciation of Capitalized Interest
Curriculum location: Expense Recognition, Example 5 coverage-ratio solutions, p. 57.
"including an adjustment to EBIT for depreciation of previously capitalized interest"
The phrase is repeated for all three years, but the amounts added to EBIT—, , and —come from the exhibit row labeled amortization of deferred financing costs. Melco's filing likewise identifies those amounts as amortization of financing costs. Such costs relate to obtaining debt; they are not depreciation of construction interest previously included in an asset's cost.
Correct reading: Identify the numerator add-backs as amortization of deferred financing costs. If an analyst chooses to exclude those financing costs from EBIT, that adjustment remains distinct from adding current-period capitalized interest to the interest-expense denominator; the disclosed amounts are not depreciation of previously capitalized construction interest.
Keeping the two adjustments separate prevents a candidate from treating debt-issuance-cost amortization as evidence of depreciation embedded in operating assets.
5. Module 2 — Example 5 Says Expensing Capitalized Interest Raises Financing Cash Flow
Curriculum location: Expense Recognition, Example 5 cash-flow solution, p. 57.
"If the interest had been expensed rather than capitalized, financing cash flows would have been higher in all three years."
Example 5 identifies Melco as a US GAAP reporter. The curriculum's own preceding explanation says capitalized construction interest appears in investing cash outflows, whereas US GAAP classifies expensed interest in operating cash flow. Reclassifying the same cash interest from capitalized to expensed therefore moves the outflow from investing to operating; it does not increase financing cash flow. The separate fact that cash payments for deferred financing costs were financing activities concerns a different cash flow.
Correct reading: If the construction interest had been expensed under US GAAP, operating cash flow would have been lower, investing cash flow higher, and financing cash flow unchanged by the reclassification.
A candidate who follows the printed direction may adjust the wrong cash-flow category when comparing capitalization policies.
6. Module 2 — Discontinued-Operation Criteria Use Separability Instead of a Significance Threshold
Curriculum location: Non-Recurring Items, Discontinued Operations, p. 65.
"Financial standards provide various criteria for reporting the effect separately, which are generally that the discontinued component must be separable both physically and operationally."
Physical and operational separability helps identify a component, but it does not by itself meet the presentation threshold. Under IFRS, the disposed component must represent a separate major line of business or geographical area, form part of a coordinated plan to dispose of one, or be a qualifying subsidiary acquired for resale. Under US GAAP, the disposal must represent a strategic shift that has—or will have—a major effect on operations and financial results. Separability alone does not supply either significance test.
Correct reading: First identify a component, then apply the relevant significance threshold: the separate-major-line-or-geography criteria under IFRS, or the strategic-shift-with-major-effect criterion under US GAAP.
This prevents a candidate from classifying every separable disposal as a discontinued operation without testing whether it is sufficiently significant.
7. Module 3 — Disposal-Gain Rule Omits the IFRS FVOCI Equity Exception
Curriculum location: Financial Instruments, classification and measurement, p. 100.
"Realized gains or losses as a result of a sale are reported on the income statement."
The statement is too broad. Under IFRS 9, an entity may irrevocably present changes in the fair value of a qualifying equity investment in other comprehensive income. When that investment is sold, the accumulated amount is not reclassified to profit or loss.
Correct reading: Realized disposal gains and losses usually enter profit or loss, but accumulated OCI for an IFRS equity investment designated at FVOCI is not recycled to profit or loss on disposal.
This distinction prevents a candidate from misstating net income by recycling accumulated OCI when an IFRS FVOCI equity investment is sold.
8. Module 3 — US GAAP Fair-Value Measurement Is Overgeneralized Outside Significant Influence
Curriculum location: Financial Instruments, US GAAP equity-security measurement, p. 101.
"all investments in equity securities (other than investments giving rise to ownership positions that confer significant influence over the investee) are measured at fair value"
Curriculum location: Financial Instruments, Exhibit 4, Measured at Cost or Amortized Cost, p. 101.
"Unquoted equity instruments (in limited circumstances in which the fair value is not reliably measurable, cost may serve as a proxy [estimate] for fair value)"
The categorical sentence conflicts with Exhibit 4 on the same page, which preserves a limited cost-based treatment for unquoted equity instruments whose fair value is not reliably measurable. Under ASC 321, a qualifying equity security without a readily determinable fair value may use the measurement alternative, subject to impairment and observable-price adjustments.
Correct reading: US GAAP generally measures equity securities outside significant influence at fair value through income, but a qualifying security without a readily determinable fair value may use the ASC 321 measurement alternative.
This exception can change both the balance-sheet amount and the income effect selected in an exam question.
9. Module 3 — Ratio Analysis Item 2 Says the Cash Ratio Increased Instead of Decreased
Curriculum location: Ratios and Common-Size Analysis, Ratio Analysis item 2 solution, p. 115.
"B and C are correct."
"The cash ratio is slightly higher in 2017 than in 2016."
The displayed data give a 2017 cash ratio of and a 2016 ratio of . The cash ratio therefore decreased, matching the table's rounded values of and .
Correct reading: A, B, and C are correct: the cash, quick, and current ratios all decreased from 2016 to 2017.
The correction adds option A to the valid selections and reinforces calculation-first ratio comparison.
10. Module 5 — Exhibit 3 Understates Financing Cash Outflows by USD100
Curriculum location: Common-Size Analysis of the Cash Flow Statement, Exhibit 3, p. 161.
"Net cash used for financing activities"
The displayed financing outflows are USD500 to retire long-term debt, USD600 to retire common stock, and USD1,120 of dividends. Together they total USD2,220. The printed USD2,120 subtotal cannot reconcile to the reported USD152 decrease in cash, while the corrected USD2,220 outflow does:
Correct reading: Net cash used for financing activities is USD2,220, not USD2,120.
For a candidate, the transferable check is to reconcile category subtotals both to their component rows and to the period's net change in cash before using them in common-size analysis.
11. Module 5 — Exhibit 5 Setup Calls Customer Receipts Net Revenue
Curriculum location: Common-Size Analysis of the Cash Flow Statement, Exhibit 5 setup, p. 163.
"using net revenue (cash received from customers) for the company in 2018 of USD23,543 from Exhibit 3."
Customer cash receipts are not the same as accrual revenue when receivables change. Exhibit 3 reports USD23,543 received from customers and Exhibit 5 reports a USD55 increase in accounts receivable, so 2018 net revenue is USD23,598. That denominator reproduces the displayed percentages: for example, for operating cash flow and for financing cash outflow.
Correct reading: Exhibit 5 uses net revenue of USD23,598 as its denominator. USD23,543 is customer cash receipts; the USD55 increase in accounts receivable bridges receipts to revenue.
A candidate who treats collections as revenue will select the wrong denominator whenever accounts receivable changes.
12. Module 6 — IAS 2 Exception Paragraph Overstates Scope and Merges NRV with Fair Value
Curriculum location: Inventory Valuation, IAS 2 measurement-exceptions paragraph, p. 175.
"does not apply to the inventories of producers"
Curriculum location: Inventory Valuation, IAS 2 measurement-exceptions paragraph, pp. 175–176.
"net realizable value (fair value less costs to sell and complete)"
IAS 2 does not remove these inventories from the Standard as a whole. It provides conditional exceptions from its measurement requirements: qualifying producer inventories use net realizable value under established industry practice, while qualifying commodity broker-trader inventories use fair value less costs to sell. The quoted parenthesis also collapses two different measures. Net realizable value is an entity-specific estimate of selling price less completion and selling costs; fair value less costs to sell is market-based.
Correct reading: Only IAS 2's measurement requirements are excepted for these qualifying inventories. Producers of agricultural and forest products, agricultural produce after harvest, and minerals and mineral products use net realizable value when the stated industry-practice condition is met; qualifying commodity broker-traders use fair value less costs to sell. The two measurement bases are not interchangeable.
A candidate who merges these exceptions may choose the wrong measurement basis, misclassify a market-based amount as net realizable value, or incorrectly disregard IAS 2 requirements beyond measurement.
13. Module 7 — Indefinite-Life Intangible Paragraph Treats Historical Cost and Fair Value as Universal
Curriculum location: Impairment and Derecognition of Assets, indefinite-life intangibles paragraph, p. 217.
"Instead, they are carried on the balance sheet at historical cost but are tested at least annually for impairment."
Curriculum location: Impairment and Derecognition of Assets, following sentence, p. 217.
"Impairment exists when the carrying amount exceeds its fair value."
The Module itself defines IFRS recoverable amount on p. 215 and later recognizes the IFRS revaluation model on p. 221. Against that internal context, the paragraph combines two reporting frameworks and presents both historical cost and fair value as universal. Under IFRS, an indefinite-life intangible is tested at least annually by comparing its carrying amount with recoverable amount, the higher of fair value less costs of disposal and value in use. If the cost model is used, the asset is carried at cost less impairment; IFRS also permits a revaluation model when its conditions are met. Under US GAAP, an indefinite-lived intangible asset other than goodwill is assessed for impairment at least annually; when the quantitative test is performed, its carrying amount is compared with fair value. Goodwill follows its separate reporting-unit impairment model.
Correct reading: Indefinite-life intangibles are not amortized and are tested at least annually. Apply the IFRS recoverable-amount test and the applicable IFRS carrying model. For a US GAAP indefinite-lived intangible asset other than goodwill, compare carrying amount with fair value when the quantitative test is performed; goodwill follows its separate model.
A candidate who merges the frameworks may identify impairment incorrectly when value in use exceeds fair value less costs of disposal, or overlook the IFRS revaluation model when analysing carrying amounts and disclosures.
14. Module 7 — IFRS Reversal Paragraph Applies Recoverable Amount to Held-for-Sale Assets
Curriculum location: Impairment and Derecognition of Assets, reversal paragraph, p. 218.
"increases regardless of whether the asset is classified as held for use or held for sale"
The paragraph applies one recoverable-amount reversal mechanism whether an asset is held for use or held for sale and states the ceiling only as the previous carrying amount. IAS 36 excludes non-current assets held for sale from its impairment scope. IFRS 5 instead recognizes a gain for a later increase in fair value less costs to sell of a non-current asset or disposal group, but only up to the applicable cumulative impairment loss previously recognized under IFRS 5 or IAS 36.
Correct reading: For an identifiable long-lived asset within IAS 36, reverse an impairment when the relevant estimates improve, capped at the carrying amount, net of depreciation or amortization, that would have existed had no impairment loss been recognized. Once a non-current asset or disposal group is classified as held for sale, apply IFRS 5's fair-value-less-costs-to-sell subsequent-gain rule and applicable cumulative-impairment limit instead of the IAS 36 recoverable-amount rule.
The conflation can cause a candidate to use the wrong reversal trigger or measurement basis for a held-for-sale item, or apply the wrong ceiling. Disposal-group goodwill allocation is a separate issue governed by IFRS 5.
15. Module 7 — Distribution to Owners Is Classified as Held for Sale
Curriculum location: Impairment and Derecognition of Assets, derecognition opening paragraph, p. 218.
"sell or to distribute"
Later in the same paragraph:
"held for sale"
The Module itself separately names held-for-distribution treatment on p. 219 and applies it to the FCA disposal group on p. 220. Those passages contradict the p. 218 statement. IFRS distinguishes a non-current asset or disposal group held for sale from one held for distribution to owners. A sale route uses the held-for-sale classification and criteria. A distribution route uses the held-for-distribution-to-owners classification when the asset or disposal group is immediately distributable in its present condition, the distribution is highly probable, and completion is expected within one year.
Correct reading: Classify a qualifying non-current asset or disposal group intended for sale as held for sale, and one intended for distribution to owners as held for distribution to owners. Do not label both routes held for sale or apply the held-for-sale criteria to a distribution.
A candidate who treats a distribution as a sale may apply the wrong classification criteria and misclassify the disposal in the financial statements.
16. Module 8 — Example 3 Prints 62,902 Instead of 62,092
Curriculum location: Leases, Example 3 statement of cash flows, p. 250.
"Cash flow from financing activities"
The displayed lease payment is 100,000 and Year 1 interest is 37,908, so the financing principal is 62,092. The earlier amortization schedule gives that same amount, while the printed table's 62,902 sums with interest to 100,810 and cannot reconcile to its own 100,000 total.
Correct reading: The Year 1 financing cash outflow is , calculated as .
The printed inputs cannot reproduce the cash-flow row or reconcile it to the 100,000 total, undermining worked-example checking.
17. Module 8 — Lessor Accounting Applies Immediate Gain Recognition to Direct-Financing Leases
Curriculum location: Leases, Lessor Accounting, p. 251.
"the distinction is immaterial from an analyst's perspective."
The next sentence says:
"simultaneously recognizing any difference as a gain or loss."
The distinction changes profit timing. Under US GAAP, a sales-type lease recognizes selling profit or loss at commencement. A direct-financing lease recognizes any selling loss immediately but defers selling profit as part of the net investment in the lease. The module's Practice Problem 9 solution on p. 275 likewise distinguishes inception sales revenue for a sales-type lease from interest income under a direct-financing lease.
Correct reading: Treat sales-type and direct-financing leases as analytically different when selling profit exists: recognize sales-type selling profit or loss at commencement, but defer direct-financing selling profit as part of the net investment while recognizing any selling loss immediately.
A candidate may recognize selling profit too early and miscompare inception revenue and earnings across lessor classifications.
18. Module 8 — Unfunded Postemployment Benefits Are Expensed When Paid
Curriculum location: Financial Reporting for Postemployment and Share-Based Compensation Plans, Deferred Compensation, p. 254.
"thus, benefit payments are often expensed as incurred."
An unfunded plan still creates deferred compensation as employees render service. Funding status affects how benefits will be financed; it does not postpone expense and liability recognition until payment. Once the obligation has been recognized, a benefit payment reduces that obligation.
Correct reading: Recognize postemployment benefit expense and the related obligation as employees render service. When an unfunded benefit is later paid, reduce the obligation rather than recording the payment itself as new expense.
A candidate may use cash-basis expense recognition, omit the accrued obligation, and misread the effect of later benefit payments.
19. Module 8 — Pension-Cost Paragraph Classifies All Components Like Employee Compensation
Curriculum location: Financial Reporting for Postemployment and Share-Based Compensation Plans, US GAAP defined-benefit accounting, p. 255.
"Pension expense on the income statement is classified on a functional basis like other employee compensation expenses."
Under US GAAP, only service cost is presented in the same line items as other compensation costs and may be capitalized in inventory when appropriate. Other components of net periodic benefit cost are presented separately from service cost and, if the income statement presents an income-from-operations subtotal, outside that subtotal.
Correct reading: Present and, when appropriate, capitalize only service cost like employee compensation. Present all other net periodic benefit-cost components separately and, if an income-from-operations subtotal is presented, outside that subtotal.
A candidate may place interest and other non-service pension components in operating expense, distorting operating income, margins, and capitalization analysis.
20. Module 8 — SARs Paragraph Excludes Private and Highly Illiquid Companies
Curriculum location: Financial Reporting for Postemployment and Share-Based Compensation Plans, Other Types of Share-Based Compensation, p. 263.
"Unlike SARs, phantom shares can be used by private companies"
The sentence continues:
"or by highly illiquid companies."
The categorical private-company and illiquidity contrast is false: Topic 718 expressly illustrates a nonpublic entity granting cash-settled SARs. The sentence's separate point that phantom shares can be used for untraded business units remains intact.
Correct reading: Private or nonpublic issuer status and share illiquidity do not categorically bar SARs. Phantom shares may be used for private companies, untraded business units, or highly illiquid companies.
A candidate may incorrectly rule out a SAR plan solely because an issuer is private or its shares are illiquid.
21. Module 9 — Advance Customer Payments Are Assigned a Deferred Tax Liability
Curriculum location: Deferred Tax Assets and Liabilities, Realizability of Deferred Tax Assets, p. 284.
"Pinto Construction receives advance payments from customers that are immediately taxable but these payments are not recognized as accounting income until Pinto Construction fulfills its obligations in later reporting periods."
"A deferred tax liability may be created only if the company expects to be able to realize the economic benefit of the deferred tax liability in the future."
Tax has already been recognized on the customer advances while the related accounting revenue will be recognized later. That timing pattern creates a deductible temporary difference and therefore a deferred tax asset, subject to the applicable recognition threshold. It does not create a deferred tax liability, and realizability of future taxable profit is a deferred-tax-asset recognition issue. The paragraph's later reference to equipment introduces a different fact rather than curing the classification error.
Correct reading: Immediately taxed customer advances whose accounting revenue is deferred create a deferred tax asset. Recognize that asset only to the extent that the applicable deferred-tax-asset realizability criterion is met; do not apply that criterion to a deferred tax liability.
The printed treatment can make a candidate reverse both the DTA/DTL direction and the recognition test applied to the resulting tax effect.
22. Module 9 — A Deferred Tax Liability Is Called a Temporary Difference
Curriculum location: Deferred Tax Assets and Liabilities, Question Set question 1 solution, pp. 287–288.
"Because the differences between tax and financial accounting will correct over time, the resulting deferred tax liability, for which the expense was charged to the income statement but the tax authority has not yet been paid, will be a temporary difference."
The temporary difference is the difference between an asset or liability's carrying amount and its tax base. A deferred tax liability is the tax effect recognized because a taxable temporary difference exists; it is not itself the temporary difference. Nearby wording about later reversal does not make those two accounting objects interchangeable.
Correct reading: The depreciation mismatch creates a taxable temporary difference, and the tax effect of that difference is recognized as a deferred tax liability.
Keeping the difference separate from its tax effect prevents a candidate from confusing the base used in deferred-tax calculations with the balance-sheet amount produced by that base.
23. Module 9 — Micron Solution Says USD64 Million Increases the Tax Provision
Curriculum location: Presentation and Disclosure, Example 6 question 3 solution, p. 302.
"The disclosure in Exhibit 20 shows that the increase in the valuation allowance increased the income tax provision as reported on the income statement by USD64 million in 2017."
Exhibit 21 presents the income-tax reconciliation on a signed “(provision) benefit” basis. Its displayed rows reconcile as
The positive USD64 million valuation-allowance item therefore reduced the magnitude of the provision; the solution states the opposite direction. The separate p. 301 sentence using the USD64 million and USD63 million figures can reasonably refer to Exhibit 21's identically labelled reconciliation line.
Correct reading: The USD64 million valuation-allowance line reduced Micron's reported 2017 income tax provision; it did not increase it.
The printed interpretation can make a candidate reverse the income-statement effect of the valuation-allowance item.
24. Module 9 — A Deferred Tax Benefit Is Presented as Part of Current Tax
Curriculum location: Presentation and Disclosure, Question Set question 3 solution, p. 304.
"The income tax provision in Year 3 was USD54,144, consisting of USD58,772 in current income taxes, of which USD4,628 were deferred."
Exhibit 24 reports USD58,772 of current tax and a separate USD4,628 deferred tax benefit in parentheses. The displayed total is reproduced by . Saying that the deferred amount is part of current tax obscures both the component classification and the benefit's sign, even though the keyed total remains correct.
Correct reading: The USD54,144 income tax provision consists of USD58,772 of current tax expense less a USD4,628 deferred tax benefit.
Following the printed component description can make a candidate add rather than subtract a deferred tax benefit when reconstructing total tax expense.
25. Module 10 — Valuation-Allowance Entry Reverses the Tax-Expense Direction
Curriculum location: Accounting Choices and Estimates, deferred-tax-asset valuation-allowance example, p. 352.
"EUR225 million credit to the deferred tax provision"
The example first recognizes a deferred tax asset of EUR250 million and a corresponding tax benefit. It then concludes that only EUR25 million is realizable, so a EUR225 million valuation allowance is needed. Crediting the valuation allowance reduces the net deferred tax asset, but the offsetting entry must be a debit to deferred tax expense or provision. A second credit to the provision would enlarge the tax benefit instead of reversing most of it.
Correct reading: Record a EUR225 million debit to deferred tax expense or provision and a EUR225 million credit to the valuation allowance. The net deferred tax benefit and net deferred tax asset are then both EUR25 million.
The printed direction can make a candidate reverse the effect of a valuation allowance on tax expense and net income. Increasing the allowance raises tax expense and lowers net income; releasing it has the opposite effect.
26. Module 10 — Exhibit 22 Footnote Uses 20% Instead of the Table's 40% Rate
Curriculum location: Accounting Choices and Estimates, Exhibit 22 declining-balance footnote, p. 357.
"Declining balance rate of "
Exhibit 22 changes the asset's useful life from 10 years to five years, and every entry in the declining-balance rate column displays 40%. The footnote nevertheless repeats the prior scenario's 10-year life and 20% rate. For a five-year life, the straight-line rate is , so the double-declining rate is .
Correct reading: The declining-balance rate is : a five-year life gives a straight-line rate, and doubling it gives .
Using 20% would halve the intended rate and prevent a candidate from reproducing the exhibit's depreciation expense and carrying amounts.
27. Module 11 — The Acer Conversion Prints TWD237.275 Million Instead of TWD237,275 Million
Curriculum location: Analytical Tools and Techniques, p. 389.
"USD7.67 billion ()."
Exhibit 4 reports Acer's FY2017 revenue as TWD237,275 million. Dividing that amount by 30.95 gives approximately USD7,666 million, or USD7.67 billion. The printed decimal point instead denotes TWD237.275 million, which converts to only about USD7.67 million—a thousand-fold difference.
Correct reading: Acer's FY2017 revenue is TWD237,275 million; at 30.95 TWD per USD, it is approximately USD7.67 billion.
For candidates, treating the point as a decimal understates converted revenue by a factor of 1,000; preserve source units and thousands separators before converting financial-statement amounts.
28. Module 11 — The Lease Comparison Says Lessors Instead of Lessees
Curriculum location: Financial Ratio Analysis, p. 394.
"Operating or finance lease treatment for lessors"
"under IFRS, operating lease treatment for lessors is not applicable"
Both references should be to lessees. Module 8's lessor-accounting discussion on p. 251 states that lessors classify leases under both IFRS and US GAAP, directly contradicting the claim that IFRS operating-lease treatment is inapplicable to lessors. IFRS 16 removes operating-versus-finance classification for lessees, while US GAAP retains a lessee classification distinction that affects expense and cash-flow presentation.
Correct reading: The bullet should say “lessees” in both places: US GAAP lessee classification affects presentation, while IFRS 16 does not apply an operating-versus-finance classification model to lessees.
For candidates, this wording reverses the IFRS–US GAAP lessee distinction; first identify whether a framework comparison concerns the party using the asset or the party providing it.
29. Module 11 — Example 11 Divides by 179,942 Instead of 179,147
Curriculum location: Solvency Ratios, p. 419.
"Thus, financial leverage was ."
The preceding sentence computes average equity as R179,147 million, and the following table repeats 179,147. The printed denominator 179,942 is neither that average nor a value that reproduces 3.83: it gives approximately 3.82.
Correct reading: Use average equity of R179,147 million: . The denominator is wrong, but the reported result of 3.83 remains correct.
For candidates, using 179,942 prevents reproduction of the reported 3.83; carrying the computed average balance into the ratio avoids that inconsistency.
30. Module 12 — Working Capital Forecast Paragraph Uses 1,493 Instead of 1,650 Inventory Days
Curriculum location: Building a Financial Statement Model, Working Capital Forecasts, p. 459.
"Inventory days on hand in FY2021 was 1,493"
The number 1,493 is the inventory balance in euro millions, not a days ratio. Exhibit 11 on the same page separately reports 1,650 days. The curriculum's own rounded FY2021 inputs—the EUR1,493 million inventory balance in Exhibit 11 and EUR330 million cost of sales in Exhibit 8 on p. 456—give days, which is consistent with the exhibit's 1,650 days after allowing for rounding in the displayed inputs. The adjacent table exposes the contradiction, but it does not make the prose's balance-to-ratio substitution correct.
Correct reading: FY2021 inventory days on hand were approximately 1,650 days; EUR1,493 million was the inventory balance. Inventory days are derived from the inventory balance and cost of sales and are not interchangeable with the balance itself.
Confusing the balance with the efficiency ratio can lead a candidate to use the wrong working-capital input and misread the direction of the forecast decline.
31. Module 12 — Exhibit 33 Reverses the 2018 Above-Trend Sign
Curriculum location: The Forecast Horizon and Long-Term Forecasting, Exhibit 33, p. 487.
""
Exhibit 33 reports 2018 revenue of EUR44.4 billion and normalized revenue of EUR41.7 billion. Because actual revenue exceeds normalized revenue, the percent above/below trend must be positive: the displayed values give . The neighboring cells confirm this sign convention: years with actual revenue above trend are positive, while years below trend are negative. Rounding can explain the printed magnitude of 6.6%, but not the minus sign.
Correct reading: The 2018 Percent above/below trend entry should be positive , not negative .
The wrong sign reverses whether an observation lies above or below normalized trend, a core interpretation in long-term forecasting.
Complete Financial Statement Analysis Errata Index
Scope: Modules 1–12, pp. 3–503 (printed page numbers).
Reviewed modules. Module 1, pp. 3–36; Module 2, pp. 37–90; Module 3, pp. 91–122; Module 4, pp. 123–154; Module 5, pp. 155–172; Module 6, pp. 173–208; Module 7, pp. 209–240; Module 8, pp. 241–276; Module 9, pp. 277–310; Module 10, pp. 311–380; Module 11, pp. 381–446; and Module 12, pp. 447–503, including the exhibits, examples, embedded Question Sets and knowledge checks, and printed Practice Problems and solutions inside those pages.
What this review covers. Errors in the printed curriculum that would change a candidate's answer or understanding: wrong numbers, wrong formulas, reversed logic, and statements that contradict the volume's own data. It does not list spelling mistakes, equation-numbering slips, or wording that is loose but defensible.
The table lists every high-value, objectively confirmed curriculum error admitted for these modules, including eligible errors in printed Practice Problems and their solutions. Repeated instances of the same defect are consolidated into one row. Extraction or import-fidelity problems, question errors not printed in the module source, disputed readings, and low-value editorial issues are outside the public errata scope.
Scroll horizontally to see every column.
References
- IFRS Foundation — Post-implementation Review of IFRS 15
- FASB — 2026 CECL Post-Implementation Review Roundtable Materials
- IFRS Foundation — IFRS 15 Revenue from Contracts with Customers
- IASB — IFRS 15 post-implementation review: Determining the transaction price
- FASB — Accounting Standards Update 2014-09, Revenue from Contracts with Customers, Section A
- SEC — Melco Resorts & Entertainment Limited 2017 Form 20-F
- IFRS Interpretations Committee — IFRIC Update, January 2016
- FASB — Accounting Standards Update 2014-08
- IFRS Foundation: IFRS 9 and equity investments
- FASB Accounting Standards Update 2016-01
- CFA Institute: 2027 Level I Curriculum Errata Notice
- IFRS Foundation — IAS 2 Inventories
- IFRS Interpretations Committee — Holdings of Cryptocurrencies
- IFRS Foundation — IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
- IFRS Foundation — IAS 36 Impairment of Assets
- FASB — ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment
- FASB — ASU 2016-02, Leases
- IFRS Foundation — IAS 19 Employee Benefits
- FASB — ASU 2017-07, Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
- FASB — ASU 2018-07, ASC 718-30-55-13 nonpublic-entity SAR example
- IFRS Foundation — IAS 12 Income Taxes
- FASB — Income Taxes Taxonomy Implementation Guide
- IFRS Foundation — IFRS 16 is now effective
- FASB — In Focus: Leases (Topic 842)
- Rémy Cointreau — 2020/21 Universal Registration Document
This article is an independent candidate-focused analysis of confirmed errors in the CFA Level I 2027 Curriculum, Volume 4 Financial Statement Analysis, Modules 1–12. It is not an official CFA Institute errata notice, and inclusion here must not be read as CFA Institute confirmation, endorsement, or approval.