CPA PEP Finance Elective study plan

Build a one-page map of IFRS vs ASPE recognition, measurement, and disclosure differences that most affect finance-role analysis (revenue, leases, financial instruments, impairment, provisions).

Reconstruct, from memory, the five-step revenue recognition model and apply it to two contract scenarios with variable consideration and a repurchase option.

Compute and interpret the key ratios derived directly from the statements (gross margin, working capital, operating cash flow to net income) for a sample set of annual reports.

Explain how accounting policy choices (capitalization, depreciation method, inventory costing) distort comparability and adjust one peer comparison accordingly.

Decompose return on equity using a DuPont framework and attribute year-over-year change to margin, turnover, and leverage components.

Build a common-size and trend analysis for a multi-year income statement and balance sheet, and flag the three largest structural shifts.

Distinguish accrual earnings from cash generation by preparing an indirect-method cash flow reconciliation and calculating free cash flow.

Identify earnings-quality red flags (channel stuffing signals, receivable days drift, capitalization of costs, non-recurring items) in a set of disclosures.

Construct a driver-based revenue forecast and a linked three-statement model for a single business unit over 3 years.

Apply sensitivity and scenario analysis (base, upside, downside) to the forecast and quantify the effect on free cash flow.

Compute NPV, IRR, payback, and discounted payback for a capital project and reconcile conflicting rankings between NPV and IRR.

Explain the limitations of each metric and justify a recommendation when metrics disagree.

Estimate incremental cash flows for a replacement decision, correctly treating sunk costs, opportunity costs, and working capital.

Adjust project cash flows for inflation and tax, including CCA tax shields or depreciation tax shields, and explain the timing convention used.

Evaluate a lease-versus-buy decision and an outsourcing decision using relevant-cost logic.

Incorporate real options qualitatively (defer, expand, abandon) and state when NPV alone understates value.

Compute the cost of each capital component (debt after tax, preferred, common equity via CAPM and dividend growth) and assemble a target-weight WACC.

Estimate and defend a beta, equity risk premium, and size or liquidity premium using stated assumptions.

Explain the trade-off theory and pecking order, and assess whether a given capital structure is consistent with either.

Evaluate the effect of a debt-financed recapitalization on WACC, coverage ratios, and financial flexibility.

Identify the entity's main financial risks (interest rate, FX, commodity, credit, liquidity) and map each to an appropriate instrument.

Explain how forwards, futures, options, and swaps are used to hedge, and distinguish hedging from speculation in a policy context.

Apply hedge accounting concepts at a high level: fair value versus cash flow hedges, effectiveness, and disclosure consequences.

Design a treasury policy covering exposure limits, counterparty limits, and authorized instruments.

Value a target using discounted cash flow, trading comparables, and precedent transactions, and reconcile the three value ranges.

Build a bridge from enterprise value to equity value, adjusting for net debt, working capital, and non-operating assets.

Assess synergies, control premium, and accretion/dilution on the acquirer's EPS for a stock-and-cash deal.

Identify deal risks (integration, cultural, regulatory, overpayment) and structure considerations such as earnouts and representations.

Analyze a governance failure or ethical dilemma in a finance context and apply a structured decision framework.

Distinguish the roles of management, the board, the audit committee, and the external auditor in financial reporting oversight.

Evaluate how compensation design and short-term pressure create incentives for earnings management, and propose controls.

Integrate all domains in a timed case, and diagnose the two weakest areas for post-plan review.