CFA Level 1 FRA – differences between accounting standards

CFA Level 1 FRA - accounting standards differences

In CFA Level 1 Exam, while reading Financial Reporting and Analysis area you will learn not only how to analyze financial statements that are prepared according to certain standards (e.g. US GAAP) but also how to analyze statements no matter which standards a company uses. You will learn certain rules that are applicable to statements prepared in accordance to IFRS, US GAAPs and IAS standards. Moreover, you will also learn how to recognize differences between statements prepared in different countries and according to different accounting standards.

After reading huge number of pages with different rules, exceptions etc., it is very hard and challenging to memorize all of them and try to recall them while solving practice problems or the questions on the CFA Level 1  exam. So we suggest the following:

While reading the curriculum, in that part, take your own notes, draw tables with bullets about differences and put down clarifications and explanations in your own words that will help you to remember how to solve problems from that area. Problems that are selected from this part of curriculum are not difficult in essence, but it is hard to quickly dig out a dozen of rules you have to remember. It might be helpful to write down steps you need to take in order to calculate certain things (e.g. how to calculate LIFO inventories if they were recorded using FIFO method).

You will be examined about certain types of questions, and if you have taken notes for the majority of these question types and you review the notes a day before your CFA Level 1 exam you will most probably remember the majority of concepts and solve the majority of questions from that part of curriculum.

Taking notes has a perfect sense for this area. You can use vendor cheat sheets with formulas that are useful for other areas (e.g. Corporate Finance) but we would highly recommend using your own notes for this area. Finally, we would also like to draw your attention to summary tables provided in the curriculum that can be helpful in the reviewing phase.

Good luck!

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