FAR – What does it stand for?
FAR refers to the Financial Accounting and Reporting section of the Exam.
FAR has a reputation that precedes it. While candidates’ opinions vary on which Exam is the most challenging, most candidates’ agree that FAR has the most significant quantity of information to master. Therefore, many consider it to be the Mount Everest of the four parts.
Breaking It Down
The FAR Exam contains 66 multiple choice questions (MCQ), 54 of which count towards your score. Moreover, the MCQ section determines 50% of your score on the FAR Exam.
There are also task-based simulations (TBS). A simulation requires you to type in an answer based on calculations and/or comprehension. Of the eight TBS you will see, only seven will count towards your score. Unlike an MCQ, you can get partial credit on most task-based simulations.
Never skip an entire task-based simulation. Since partial credit is allowed, you’re always better off trying to answer what you can than not solving anything.
To complete your multiple-choice questions and task-based simulations, you will have exactly four hours. Your test is divided into five testlets: first: 33 MCQs, second: 33 MCQs, third: 2 TBS. You then have an optional 15-minute break, which we highly recommend you take advantage of to use the restroom, hydrate, and rest your mind. The fourth and fifth testlets are each three more TBS.
Note:The FAR Exam, the same as all the CPA Exams, is taken in a testing center on a computer.
There are five main content areas on the FAR Exam. The content areas are:
- 1. Miscellaneous Items Listed in Financial Statements
- 2. Reportable Transaction
- 3. Financial Statement Standards and Concepts
- 4. Non-Profit and Non-Governmental Organizations
- 5. Governmental Bodies
The Exam is slightly more weighted to the first items listed and slightly less weighted farther down the list.
You’d need an entire study package to prepare for the Exam adequately, but some examples of items you can expect to see include: receivables, business combinations, discontinued operations, balance sheets, cash flows, notes to financial statements, budgetary process, and fund accounting. You will likely have touched on these subjects during your collegiate studies, but not to the depth required for the FAR Exam.