About the FAR CPA Exam
Updated for 2024-2025

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What will it take to pass the FAR CPA Exam in 2024-2025? The Financial Accounting and Reporting (FAR) section intimidates almost every CPA candidate. It's the longest, most challenging, and highly comprehensive section of the CPA Exam. FAR requires CPA candidates to understand US GAAP, including financial statement concepts and standards, typical financial statement items, specific types of transactions and events, governmental accounting and reporting, and nongovernmental and not-for-profit accounting and reporting.

Commencing in 2024, the format and structure of the FAR CPA Exam have undergone some changes due to the 2024 CPA Evolution. Nonetheless, the fundamental essence of the exam remains the same. In this article, we'll comprehensively understand the changes introduced in the 2024 FAR CPA Exam and offer valuable study tips to navigate them successfully for exam triumph.

The FAR Exam covers mountains of information.
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How is the FAR CPA Exam Scored?

Scores for the FAR Exam are given on a scale of 0 to 99. All CPA Exam parts must be passed with a score of 75 or higher. It does not necessarily imply that you must answer 75% of the questions correctly. The difficulty level determines the numeric value of a question. It means difficult questions have more worth than easy or moderate questions. If you answer five difficult questions and five moderate or easy questions correctly, you will score more for the difficult questions.

The CPA Exam is not curved. The AICPA employs question weights instead of altering your score based on your cohort's performance. These weights are determined based on how candidates performed during the pre-testing of the questions.

The FAR CPA Exam's MCQ testlets account for half the overall score. The remaining 50% comes from the TBS testlets. Multistage adaptive testing (MST) is eliminated and replaced with a linear test design to simplify the assembly of the CPA Exam and provide greater flexibility in the exam alignment.

The TBS scores are pre-programmed and are not modified based on the candidate's performance. Partial scoring is also applied for TBSs as they include multiple responses. You are eligible to earn credit for each accurate solution. The multistage testing method is only applicable for MCQ testlets.

FAR CPA Exam Pass Rates

Financial Accounting and Reporting is a broad section covering financial management, government accounting, fund accounting, and other topics. According to the candidates we surveyed, it is the most challenging section of the CPA Exam. It has had the lowest passing rate among the four sections for a long time. The year 2023 was no different, with a cumulative pass rate of 42.94%. It is most likely due to the vast amount of material that FAR covers and the necessity to comprehend the concepts rather than simply memorize them.


*Pass rates available till 2023 Q3.

How to Study for the FAR CPA Exam Section

Many candidates are intimidated by the FAR Exam content before they even begin studying. When studying for FAR, you must realize the importance of segmenting easy topics from the more difficult ones, and allocating study time accordingly. For example, dedicate plenty of study time to topics that are more difficult to understand, such as pensions, and dedicate less study time to topics that you already have a firm grasp on.

The multiple-choice questions for FAR can be daunting because most of them require calculations. So remember that lots of practice and patience are required for FAR. If you can figure out what’s easy and what’s hard for you and use your time wisely, you’ll get through it soon enough!

How Many Hours Should I Study for the FAR CPA Exam?

CPA Candidates frequently ask about the number of hours they should study in order to pass the FAR section of the CPA exam. The AICPA recommends spending a minimum of 300 to 400 hours studying for the CPA Exam. That equates to 80 to 100 hours of study time for each section.

However, no two CPA candidates are alike. Each person learns at a different pace and has different learning styles. Also, certain portions of the study material may take longer to get through than others. Take your study style into account and set a realistic expectation for how long it will take to study for the FAR CPA Exam. Understanding your own learning style and limitations is vital to passing.

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Frequently Asked Questions (FAQs)

To pass the FAR, you’ll need to be familiar with technical financial accounting standards and be able to perform accounting math in a timed environment. This demands a strong understanding of the material as well as numerous practice quizzes.
FAR is regarded as the most difficult section of the CPA Exam, with consistently low success rates. The amount and variety of knowledge you must know to pass this exam makes it the trickiest, according to most candidates. The FAR Exam will assess your understanding of basic accounting principles that include capital leases, bonds, and balance sheets. Furthermore, it tests your dedication and time management skills as well.
Business combinations, leases, bonds, stockholders equity, and a mix of government and non-profit organizations are the most heavily tested content topics for FAR.
Effective January 2024, the CPA Exam Evolution initiative brought significant modifications to the CPA Exam. The purpose is to ensure the exam continues to test candidates on the skills and knowledge newly licensed CPAs need in a technology-forward marketplace. In this new model, candidates will take three core sections and select one new discipline section. FAR remains as one of the core CPA Exam Sections. While much of the FAR CPA Exam content remains the same, some of the content has moved to the new Business Analysis and Reporting (BAR) discipline section. Additionally, some of the topics from the current Business Environment and Concepts (BEC) exam moved to FAR in 2024, as BEC will no longer be available.
If you passed FAR (or at least one section) of the CPA Exam before the 2024 CPA Exam started, you will be given an 18-month extension of credit to finish passing the rest of the exam. This means you will have until June 30, 2025 to pass all remaining sections of the CPA Exam without losing credit for the section(s) you passed before the end of 2023. Learn more about the CPA Examination Credit Extension Policy here.

CPA Exam candidates in most states (but not all) now allow 30 or 36 months to pass. The clock begins ticking on the date you pass your first exam section. In the past, it was 18 months but most states have extended this period to give you extra breathing room in light of recent exam changes.

You can read more about this historical rule amendment here. Please be sure to check with your State Board of Accountancy to confirm what the current rule is in your state.

Other CPA Exam Sections

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BAR CPA Exam

Learn what to expect when you take the BAR discipline of the CPA Exam, including the exam’s topics, structure, question format, and more. Plus, see how this discipline section relates to the FAR core section.

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