If you’re preparing for the CPA Canada PEP or Common Final Exam (CFE) in 2025, here are the key changes you need to know about reference materials, testable content, and exam format updates.
Changes to Exam Reference Materials
1) Management’s Discussion and Analysis (MD&A) Removal
You can find the MD&A reference materials in the Knotia Handbook:
Starting in 2025, this MD&A collection will no longer be included in exam reference materials since it won’t be updated anymore. This means you won’t see it during the exams.
However, you’re still responsible for understanding and analyzing management communications under the CPA Canada Competency Map Financial Reporting (FR) 1.4.3. While you don’t need to quote MD&A reference materials from Handbook, you must demonstrate competency in this area. This means MD&A can still be tested on the exams.
Example of how MD&A may be tested on the CPA Canada exams is below, taken from a recent CFE exam case:
2) Tax Shield Formula Update
The exam reference schedule will now include only one “Present Value of Tax Shield for Amortizable Assets” formula, applicable to assets acquired after Jan. 1, 2024. Previously, there were two formulas—one for assets bought before Jan. 1, 2024 (now outdated) and another for less common CCA classes (no longer included).
You can download the latest Exam Reference schedule in CPA Canada’s Certification Resource Centre (CRC).
(Note: As of Feb 2025, the link above shows the old exam reference schedule with two formulas. CPA Canada still needs to update it.)
Testable Standards and Regulations
1) Cut-off Dates
CPA Canada PEP and CFE exams in 2025 will test standards and regulations that were in effect or substantively enacted as of Dec. 31, 2024.
Here’s what’s included:
- IFRS: Standards in effect up to and including Jan. 1, 2025.
- ASPE, ASNPO, and CAS: Standards with an effective date of Dec. 31, 2024, as published in the Nov. 2024 CPA Canada Handbook.
- Tax Legislation: Laws substantively enacted (including those passed in the House of Commons during a minority government) by Dec. 31, 2024.
There were no major changes to IFRS, ASPE, ASNPO nor CAS in 2024. However, you need to be aware of changes issued but not yet in effect, at different proficiency levels.
2) Taxation: 2025 Changes
The 2024 Federal Budget and the Fall Economic Statement (Dec. 16, 2024) introduced various tax measures, but not all were enacted by Dec. 31, 2024. Proposed but not yet enacted tax measures include:
- Capital gains inclusion rate adjustments (including changes to the lifetime capital gains exemption).
- New immediate expensing rule for productivity-enhancing assets.
- Changes to the SR&ED program.
- Extension of the accelerated investment incentive.
- Temporary extension for charitable donations in 2024.
You may always apply a more current standard than what is required on the CFE and case portion of the CPA PEP exams, but multiple-choice questions (MCQs) follow the cut-off date rules strictly. So you should ignore above tax changes for MCQs.
However, for the CFE and PEP case portions, you can apply these new tax rules, but you’re not required to. For example, if you get a question on CCA for a manufacturing company purchasing new equipment in 2025, you can choose to apply the extended accelerated investment incentive (AII), which gives enhanced first-year CCA deduction. However, since this extension wasn’t substantively enacted, you can also apply the regular CCA half-year rule instead. Either approach would be valid in a case response.
Exam Format Changes for 2025
Starting March 2025, MCQs will only be available digitally in the exam software for Core and Elective exams. You will still receive a printed case, rough notes, and reference schedule in the exam booklet.
Extra Resources
For the 2025 CPA exams, reference materials are changing, but the core principles of testable content remain the same. Ensure you’re familiar with the latest standards and prepare for the digital-only MCQ format in upcoming exams.
For extra support, check out Gevorg’s CPA Canada exam courses for a comprehensive CPA exam tutoring package.
