Author: Gevorg CPA

Update: Please see these updated posts for May and September 2022 CFE exam cases download:

• May 2022 CFE download
• September 2022 CFE download

Similar to prior Common Final Exams (CFEs), the September 2021 CFE had Day 1, 2 and 3 cases. The following Day 1 cases were tested:

September 2021 CFE:

• Waste Disposal Incorporated (WDI) v2 (download)
  
• Distinct Hotels Corporation (DHC) v3 (download)

The following Day 2 and Day 3 cases were tested in September 2021 CFE:

• Day 2 (download):
  • Farm Fresh to You Inc. (FFTY) (300 minutes)
• Day 3 (download):
  • FenceCo (FenceCo) (90 minutes)
  • HSE Inc. (HSE) (80 minutes)
  • Amped Transit Ltd. (Amped) (70 minutes)

For the September 2022 CFE, the following Day 1 cases will be tested:

• Waste Disposal Inc. case (WDI) v3
• CanDo Fitness (CFL) v1

Where can I get these cases?

You can download by clicking on the hyperlinks above.  If you are registered for the Capstone 2 module for Summer 2022, you will receive these cases at the module. You can also simply download using the links above. If you are someone challenging the exam, such as an internationally trained accountant applying under MRA/MOU, also download using the links above.

Where can I get the solutions?

I have written my version of the solutions to September 2021 CFE cases, which you can get from here. The official solutions will be released in May, 2022, per CPA Canada’s announcement. 

How do I prepare for the CFE?

There are several prep methods for the CFE. You will need to focus on these three items:

1. Technical knowledge
2. Case writing skills
3. Strategy

I speak a lot about these items on my YouTube channel and webinars. You can check out my latest webinar.

Technicals:

• Know the key topics on each of the competencies
• Distinguish depth from breadth
• Debrief

Case writing skills:

• It’s all about following the CPA Way
• Know your case inside out
• Integrate throughout the case

Strategy:

• Prepare a study plan
• Obtain study materials
• Get support and resources

Pass the CPA Canada CFE Exam

I’m Gevorg. I’m an instructor and a CPA exam coach. If you want coaching with me, sign up for my CPA CFE Review Course, for a comprehensive prep package.

With the start of the new year, it’s the perfect time to make a clean slate and start thinking about what you want to accomplish in your CPA studies during 2022. Setting the standard as easily as possible will allow you to best use your time. This list will help you get started on how to set your new goals to ensure you reach your milestones, meet deadlines, and are kept accountable.

1. Evaluate yourself

To start planning for a goal, you should consider the things that you want to achieve. Categorizing what is important to you will allow you to create workable plans to get results. Be sure to write down these concepts. Individuals that write out objectives are more likely to accomplish them!

2. Define your goals

Once you have a high-level picture of your desires, you can get specific and define a course of action. Whether your goal is to complete all your PEP courses, pass the CFE, or achieve level 2 in PERT, ensure your goals are distinct and attainable. These goals should be separated into long and short term actions based on your priorities and your position.

The most effective way to set goals is by using the SMART method:

• Specific – Being specific makes it easier to focus on a course of action. For example, instead of having the goal to study more, try being specific about the time you plan to study at, for example, 6pm to 8pm everyday.
• Measurable – Be sure you can evaluate whether the goal was met. For example, aiming to achieve C in most AOs by the end of a module.
• Achievable – Be realistic in what you can attain for the given year. Keep in mind CPA timelines of exams, work commitments, etc. to determine what is accurate for you to invest your time in given the resources available to you.
• Relevant – Be sure to ask yourself if the goal is realistic and relevant to achieving your goal. For example, if your goal is to pass the CPA Tax exam, your goals should be focused on the Tax module, tax studying, etc.
• Time-specific – Make sure your goals are consistent with your academics, work schedule and other responsibilities. Try to establish deadlines for each step of the process.

3. Execute your goals

As you execute and be consistent with your goals, priorities and circumstances may change. Your goals may evolve over time. It is important to recognize what is working and what is not, and revisit your goals frequently. For example, you may become unexpectedly busy at work, and using your lunch break to study may no longer be realistic. While it can be challenging to accept, it is important to recognize how a new or modified goal is a better course of action.

4. Overcoming Challenges

As you face certain challenges, you can set a goal on that particular issue. In some cases, overcoming a challenge might mean enlisting help. For example, if you are struggling with the CPA Core 2 module, it may help to find an appropriate tutor or study group.

There is no better time to start thinking ahead for what you want out of the upcoming year. It is not enough to have intentions, but the right framework to accomplish an idea. Setting goals will provide you with a greater sense of motivation and confidence. Be sure to reward yourself for your accomplishments!

Get effective CPA exam coaching

If you need helping passing your exams and completing PERT at Level 2, check out CPA PEP, CPA CFE Review and CPA PER Review courses for a comprehensive prep package and coaching.

One of the key skills to assessing a financial reporting AO within a CPA Canada exam is understanding the differences between financial frameworks. We dove into depth of applying IFRS 15 to Loyalty Programs in a recent post. Where IFRS 15 provides specific guidance in the application of the standard, ASPE 3400 is judgement-based for recognizing and measuring revenue.

Example of ASPE 3400 Loyalty Program AO

Using the same example, consider the loyalty program of Entity A that sells shoes. For every $1 worth of shoe purchases, a customer receives 1 loyalty point. These points can be spent on purchases from Entity A and each point equals $0.10 worth of purchases. Based on historical trends, Entity A expects 5% of points to expire being unredeemed. That’s to say, it’s expected that 95% of loyalty points will be redeemed. So far, Entity A has sold $1,000 of shoes during the period. Assume no liability has been recorded in Entity A’s financial statements.

Analysis

The amount of revenue to be recorded needs to be assessed for Entity A. Under ASPE, this is based on a risks and rewards model, as opposed to IFRS 15 where control is the primary indicator. In this case, Entity A has an obligation to provide rewards to the customers that have earned them and collected loyalty points. This will trigger a need to assess whether a liability exists and should in fact be recorded.

To assess a liability under ASPE, the following factors should each be discussed using case facts:

• Obligations arising from past transactions or events
• Settlement may result in transfer or use of assets
• Provision of services or other yielding of future economic benefits

Measurement

Since the customers earn 1 loyalty point for each dollar spent, you must estimate the amount of points that are outstanding at the end of the period. Given that $1,000 sales have occurred, approximately 1,000 points are outstanding. To determine the amount of liability that should be accrued, the points need to be valued. Since 1 loyalty point is redeemable for $0.10 worth of purchases, it could be estimated that $0.10 x 1,000 points = $100 as the cost to Entity A (or $0.10 value per point). Factoring in the likelihood of points to be redeemed, a more accurate estimate would be $100 x 95% = $95 for the liability.

Therefore, Entity A will need to accrue $95 liability at the end of the period. Entity A may be able to accrue a lesser amount if the percentage of points outstanding not redeemed changes.

Conclusion

As the points are redeemed, the liability will be reduced and revenue is generated. The liability will also be reduced when the option for these points expire.

The guidance for ASPE liabilities and revenue are presented in ASPE Sections 1000, 3290 and 3400.

Get effective CPA exam coaching

If you need helping passing your exams, check out CPA PEP and CPA CFE Review courses for a comprehensive prep package and coaching.

The core concept of IFRS 15 is the timing of revenue recognition, which is dependent on the timing of promises to be fulfilled by the entity. IFRS 15 provides significant guidance that can be applied to various situations retailers face, such as the treatment of customer loyalty points. Understanding loyalty programs is critical to foreseeing the liability a company owes and is a great topic for CPA Canada to test your IFRS 15 knowledge.

Example of IFRS 15 Loyalty Program AO

For example, consider the loyalty program of Entity A that sells shoes. For every $1 worth of shoe purchases, a customer receives 1 loyalty point. These points can be spent on purchases from Entity A and each point equals $0.10 worth of purchases. Based on historical trends, Entity A expects 5% of points to expire being unredeemed. That is to say, it is expected that 95% of loyalty points will be redeemed. So far, Entity A has sold $1,000 of shoes during the period.

Analysis

In this case, this option provides a material right to the customer that it would not receive without entering this contract (the purchase of shoes). It also gives the customer the option to acquire additional shoes at a price lower than the stand-alone selling price of the shoes in the future. This transaction involves committing to two performance obligations:

• Goods purchased
• Rights related to the loyalty points.

Because of this, it is necessary to estimate the stand-alone selling price of the option to allocate based on the separate performance obligations. For case writing, these criteria should be discussed with application to specific case facts. Write using the IFRS 15 5-step model and analyze the two performance obligations.

This estimate should account for the following factors:

• Discount the option gives
• Discount the customer could receive without the option
• Likelihood the option will be exercised

Measurement

First, you must calculate the stand-alone price of the option. This is equal to the amount sold, factoring in the value of the points and point redemption rate ($1,000 x $0.10 x 95% = $95). The total transaction value is equal to the initial purchase value plus the value of the option ($1,000 + $95 = $1,095).

The amount sold ($1,000) should then be proportionally allocated to the loyalty program as a credit to accounts payable, and allocated to the product sales as a credit to revenue upon the initial sale of shoes:

• Allocated to the loyalty program = $1,000 x ($95 / $1,095) = $87
• Allocated to the sale of shoes = $1,000 x ($1,000 / $1,095) = $913
  (Note: As a check the total should equal the amount the customers have paid for (i.e. $1,000)).

Conclusion

If the likelihood of redemption cannot be determined, management may choose to assume 100% redemption or recognize revenue to the points on redemption. Revenue will also be recognized when the options for these points expire.

For some additional guidance on IFRS Loyalty Programs, check out paragraphs 26, B39-B43.

Get effective CPA exam coaching

If you need helping passing your exams, check out CPA PEP and CPA CFE Review courses for a comprehensive prep package and coaching.

Big congrats to GevorgCPA students who passed!!

For additional support on what to do next if unsuccessful, please refer to the blog post: https://gevorgcpa.com/unsuccessful-cfe-candidates-what-to-do-next/

You can also contact me for free consultation.

 

As you continue on your journey towards your CPA designation, being able to debrief and achieve competency efficiency becomes increasingly important. In fact, debriefing will likely become your main study method.

1. Know when to debrief

The most effective way to debrief is not too long after writing the case. This way, the case facts are fresh in your mind and time can be saved from avoiding having to read the case again. Debriefing the case the following day will be more realistic and effective in managing a work-study balance.

2. Understand the marking competencies and how it relates to you

CD – Know what you completed very well, but not always the optimal rank.
C – Know what you you completed correctly
RC / NC – Know what you were on the right track on, but needed to include more
NA – Know what assessment opportunities you missed

The objective is to achieve a C, noting that achieving a CD might mean you spent too much time on one assessment and could have used that time elsewhere. The goal is to do enough required for each assessment. Focus your attention on the assessments that are not at a level C.

3. Review the sample responses

A sample response will show the level of depth/breadth expected of a candidate writing under the time constraints. Review how you could have approached a quantitative and qualitative analysis more efficiently, what case facts might have been missed, etc. Think “What more did I need to include in my response?”.

4. Review the solution

The solution demonstrates a “best” response, meaning, under no time constraints. It should be noted that candidates are not expected to strive for perfection. However, the solution provides a resource to ensure that your notes are complete.

5. Create and organize your notes

Organize your notes by topic (i.e. Financial Reporting, Tax, etc.) and continue to add to them each debriefing session. Watch as your knowledge on the topics expand over time.

6. Give enough time to the debrief process

Do not rush the process of debriefing and making notes. Typically debriefing a case should take as long as it took you to write the case (i.e. debrief 2 hours for a 2 hour case).

While debriefing can be an intimidating process, it is a necessary process to ensure you are making the steps to improving with each and every case. Building this habit will make the CPA journey much more manageable.

Get effective CPA exam coaching

I’m Gevorg, I’m an instructor and a CPA exam coach. If you need helping passing your exams, sign up for my CPA PEP and CPA CFE Review Course for a comprehensive prep package.

With the transition to writing the CPA Canada Common Final Exam (CFE) in hotel rooms, a software called FolioViews has been implemented by CPA Canada to replace Knotia as reference during the exam. You’ll get access and download FolioViews in Capstone 2. I’ll share tips and tricks in this post.

Tip #1: Narrow the search

When searching in FolioViews, you search through the entire database. This means your results will be all over the place. To be efficient, checkmark the standard you would like to search and it will narrow down the search. For example, if your CFE case is IFRS, checkmark IFRS so that FolioViews searches only there:

Tip #2: Use advanced search

There are two ways to search in FolioViews: [Basic] Query and Advanced Query. Both are accessible through Search drop down on the top toolbar:

 

 

 

 

The basic Query will search in the database and show you the results on the bottom of the screen. For example, I searched the term “biological” and FolioViews found several results:

 

The Advanced Query is better in the sense that it lets you see the number of results before you perform the search. It also shows you the results when you use phrases. For example, when I search “biological asset” using Advanced Query, it shows me that there are 48 matches. This is useful in determining if my multi-word query will lead to results (or no results) before I execute the search.

Tip #3: Assign a hotkey to Query

The first instinct when making a search is to press CTRL + F (like you do in other programs). In FolioViews, this brings up “Find Infobase”, which is not that useful. Let’s re-map this hotkey so that CTRL + F performs a basic Query:

• Click on Tools > Customize
• Choose Keyboard
• In Command Category, pick Search
• Click on Query
• Click on the box “Press new shortcut key” and press CTRL and F on keyboard. It will say that this hotkey is assigned to another command. Ignore it, click Assign on the top.
• Press OK to accept the changes.

Now you can perform a basic Query with CTRL +F and Advanced Query with the default hotkey F2.

Tip #4: Use HitList tab

In both basic Query and Advanced Query, the results are shown in All tab, on the bottom:

 

 

 

 

 

 

 

This is hard to work with, so I suggest clicking on HitList tab and scrolling through results there. This is much faster than clicking on next/previous hit buttons. Once you found your desired result, double click and it will open that record. Note that it will then take you to Document tab; click on All tab to return to the original view.

FolioViews Installation Guide

As candidates will be required to access their reference material through FolioViews, below is a short guide on how to install FolioViews as well as NFO files.

1. Installation files are in D2L “Introduction to Capstone 2” and the CFE.
2. Right click on the zip file and select open.
3. To start installing, double click on the file “VPL_FOLIO_VIEWS_471.exe”.
4. Follow the steps that appear on your screen, such as “ accept the terms of the licence agreement.” and selecting “Typical (Local) Installation”.
5. Download CPA Handbook Folio and Income Tax Collection Folio (shown above) by right clicking on the files and selecting “Extract All”
6. Select “Browse” and find destination “C:VPL\NFO”. Then click “Select Folder” and “Extract”
7. Click on the “Start” button in Windows and find the folder “Virtual Professional Library”. Click on the “Folio Views 4.7.1” link.
8. Upon start up, the page “Folio Views Getting Started” will appear.
9. Open the files you downloaded within the NFO folder by clicking “File” and “Open”.

 

 

 

 

 

 

 

 

 

Other notes:

• FolioViews is not compatible on Macs.
• If you’re using an employee-issued laptop, ensure no conflicts with any existing software with your IT department.
• FolioViews files can be downloaded an unlimited amount of times.

Get effective CFE coaching

I’m Gevorg, I’m an instructor and a CPA exam coach. If you want coaching with me, sign up for my CPA CFE Review Course for a comprehensive prep package.