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Can You Answer this FAR Question? If not, sit for FAR now!


The 2020 CPA Exam changes will be effective on the CPA Exam starting January 1, 2020. There have been major changes to the FAR section of the Exam, most notably around Financial Instruments – Credit Losses. The changes in Financial Instruments – Credit Losses are complex.  That’s why our CPA Experts recommend sitting for FAR before the end of the year to avoid these significant changes within the Exam.

Below is a sample question that could be asked on the new FAR Exam. Are you able to answer the question? 

FAR Question:

1.  Data regarding Ball Corp.’s available-for-sale debt securities follow:

Cost                    Allowance for Credit Losses Market Value
December 31, year 2             $150,000 $10,000 $130,000
December 31, year 3 150,000 0 160,000


Ball does not elect the fair value option to account for available-for-sale securities.  Ball’s year 3 other comprehensive income would be

a.    $0

b.    $10,000

c.    $20,000

d.    $30,000

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