Changes to CFA level II: Effective February 2023

Changes to CFA level II: Effective February 2023

Once again, CFA made changes to its 2023 curriculum, just like every year. For the year 2023, there have been significant changes to CFA level II curricula as a result of extensive practice analysis and curriculum development. 

The revisions include updates that involve small changes, for instance, in data, examples, and references brought up to date. Additionally, there are some revisions that bring about a medium degree of change. In such cases, there’s an improvement in clarity and accuracy through content adjustment and improvement. Major revisions in 2023 changes include rewriting or alteration of content to reflect advances in the industry. As part of these changes, the CFA institute introduced new content areas and dropped off materials that are no longer relevant.

Other than the changes in content, there are also structural changes as well as changes in the pedagogical approach with the goal of improved outcomes.

Key changes to CFA level II curriculum in 2023

CFA level II candidates for 2023 should expect the following structural changes in addition to the above-mentioned changes in content coverage.  These changes should inform how you prepare for the coming exams.

Like in level I, the new CFA level II curriculum structure is as follows.

$$\textbf{Topic}\ \ \longrightarrow\ \ \textbf{Learning Module}\ \ \longrightarrow\ \ \textbf{Learning Outcome Statements (LOS)}\ \  \longrightarrow\ \ \textbf{Lessons}$$

Where we had Readings in 2022, now we have easier-to-consume Learning Modules and learning outcomes there’s no numbering of learning outcomes as they were in the previous versions. The CFA institute also expanded the use of spreadsheet modeling and subdivided Real Estate readings into three readings with more streamlined content. These are the main highlights of changes in the 2023 cycle.

Level II Content Revision

Quantitative Methods

In quantitative methods, there were major revisions in the Reading “Introduction to Linear Regression.” The content coverage is now divided into four Learning Modules, which include;

  • Basics of Multiple Regression and Underlying Assumptions
  • Evaluating Regression Model Fit and Interpreting Model Results
  • Model Misspecification
  • Expansion of Multiple Regression

The CFA institute also updated the content with Investment-focused datasets and the coverage expanded in the last module on the Evaluation of Influential Observations and Outliers.

The reading (Introduction to Linear Regression), now a learning module, dropped from level II and moved to level I.

Time-Series Analysis, Machine Learning, and Big Data Projects remain unchanged.


The institute revised the three Readings on this topic into three Learning modules.

  • Currency Exchange Rates: Understanding Equilibrium Value has been updated.
  • Economic Growth has undergone some revision and 
  • The Economics of Regulation remains unchanged.

Financial statement Analysis

Financial Statement Analysis had six readings which have now become learning Modules, and with an additional module to make them seven. These are:

  • Intercorporate Investments
  • Employee Compensation
  • Multinational Operations
  • Analysis of Financial Institutions
  • Evaluating the Quality of Financial Reports
  • Integration of Financial Statement Analysis Technique
  • Financial Statement Modeling

In all these Learning Modules, the content coverage remains the same except in Financial Statement Modeling (Previously Industrial and Company Analysis). This module has undergone some revision. The CFA institute introduced spreadsheets in LES for financial modeling and added some content on behavioral biases in forecasting.

This Reading(learning Module) moved here from the topic “Equity Valuation”

Corporate Issuers

This topic had five readings in 2022.  The Learning Module ( Cost of capital) replaced the two of the Readings(Capital structure and Capital Budgeting). 

  • Cost of Capital got additional Advanced topics. This module focuses on extensions and complexities in estimating rates of return required for equities and fixed income and issues in constructing the Weighted Average Cost of Capital. 
  • Corporate restructuring (Previously Mergers and Acquisitions) has undergone major revisions. This module has been completely rewritten. Most of the content is new, with a broader focus on a variety of corporate restructuring events, their analysis, and their incorporation into financial modeling for forecasting and valuation. Supporting spreadsheets have also been introduced into the LES.

Equity Valuation

This topic had eight readings previously. One reading, “Return Concepts ”, has been completely dropped, while “Industry and Company Analysis” has been revised to “Financial Statement Modeling and moved to the Financial Statement Topic.

The CFA institute revised the remaining six readings to learning Modules without any alteration in content. They are:

  • Equity Valuation: Applications and Processes
  • Discounted Dividend Valuation
  • Free Cash Flow Valuation
  • Residual Income Valuation
  • Private Company Valuation

Fixed Income

The institute revised the readings on this topic have been to Learning Modules without any changes in content coverage. They are:

  • The term Structure and Interest Rate Dynamics
  • The Arbitrage-Free Valuation Framework
  • Valuation and Analysis of Bonds with Embedded Options
  • Credit Analysis Models
  • Credit Default Swaps


The two readings on this topic are now Learning Modules, but the content coverage remains the same:

  • Pricing and Valuation of Forward Commitments
  • Valuation of Contingent Claims

Alternative Investments

This topic had three readings in 2022, two of which didn’t change in content coverage but one got a revision considerably. They include:

  • Private Equity Investments
  • Introduction to Commodities and Commodity Derivatives
  • Real Estate Investments – Here, Public and Private Real Estate readings have been combined, and the content has been streamlined and divided into three learning modules.

Portfolio Management

All the readings on this topic have been revised into learning modules with no alteration to the content. The modules are as follows:

  • Exchange Traded Funds: Mechanics and Applications
  • Using Multifactor Models
  • Measuring and Managing Market risks
  • Analysis of Active Portfolio Management
  • Trading costs and Electronic Markets

Ethical and Professional Standards

In this topic, the first two readings have been revised to learning modules without any changes in content coverage. They are:

  • Code of Ethics and Standards of Professional Conduct
  • Guidance for Standards I- VII
  • Guidance for Standards I- VII

The last module, Application of the Code and Standards: Level II, has seen new cases added to ensure complete coverage of the Code and Standards.

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