How to Learn Financial Reporting For CPA Canada Exams

Financial Reporting (FR) can be a challenging subject to grasp, and many CPA candidates find it difficult to identify the relevant CPA Canada Handbook section and paragraphs in their exam cases. This blog will guide you through a more straightforward approach to understanding FR references, helping you make the most of your study time and improve your exam performance.

FR sections in the Handbook

To begin, it’s essential to know that the FR standards in the CPA Canada Handbook are divided into the following general sections:

  • Definition
  • Recognition
  • Initial and subsequent measurement
  • Disclosure/presentation
  • Other sections (eg Appendix A, B)

In some Assessment Opportunities (AOs), we write just the definition, while in other AOs, we write just recognition, and in others, a combination some of the above (for example, definition + recognition + initial measurement).

While applying logic to determine which paragraph to refer to is helpful, it’s not always straightforward. For example, if we have an AO where users are unsure if an asset is Property, Plant, and Equipment (PPE) or inventory, it makes sense to discuss the definitions of both and conclude which one fits better. However, this is a simple example and things can get complicated in the Common Final Examination (CFE) cases.

Understanding triggers is key

For more complex FR AOs, you need to look for triggers. Examples of triggers include:

  • Agent: Leads to agent vs. principal section of revenue.
  • Lawsuit: Leads to contingency
  • Decline in market value: Leads to impairment
  • Patent: Leads to intangible assets
  • 100% share purchase: Refers to business combination
  • Notes receivable: Leads to financial instruments
  • Segment: Leads to operating segments

Practice makes perfect

Understanding the connection between triggers and paragraphs is challenging and it’s nearly impossible to learn this by simply reading theory. The key is to write dozens of cases, which will help you learn these trigger-to-section connection over time.

In the beginning, you will get most of them wrong, but that’s okay. As time goes on, you will start to see patterns and identifying the relevant paragraphs will become easier.

Focus on writing cases, take guesses if you’re unsure, learn from the solutions provided and keeping very organized notes.


After practicing several cases (~20-30 cases), it becomes easier to see the connections between triggers and the relevant FR paragraphs. So practice is the key to learning FR and to success in CPA Canada exams.

My FR technical notes show each Handbook standard in point form, divided into sections discussed above. Free preview is available here. Consider adding this resource to your CPA exam studies.