The Financial Accounting and Reporting section, known as the FAR CPA Exam, is a four-hour test of your ability to prepare and analyze financial statements under U.S. accounting standards, and it is widely considered the most content-heavy section of the CPA Exam. Its 2025 cumulative pass rate was 42.12%.1AICPA & CIMA. Learn More About CPA Exam Scoring and Pass Rates FAR is one of three Core sections every candidate must pass, alongside Auditing and Attestation (AUD) and Taxation and Regulation (REG), before adding a chosen Discipline section to earn exam credit.2AICPA. Exploring the CPA Exam Disciplines
What FAR Covers
The AICPA Blueprints divide FAR into three scored content areas, each with a published allocation range that tells you roughly how much weight to expect:3AICPA & CIMA. Learn What Is Tested on the CPA Exam
- Financial Reporting (30–40%). Preparing and presenting a complete set of financial statements (balance sheet, income statement, statement of cash flows, and statement of equity) under GAAP as set by the Financial Accounting Standards Board. This area also covers the conceptual framework behind GAAP, including qualitative characteristics, recognition and measurement principles, and notes to financial statements.4Financial Accounting Standards Board. FASB – Standards
- Select Balance Sheet Accounts (30–40%). Detailed accounting for receivables, inventory, property and equipment, intangible assets, and investments, including valuation methods, impairment testing, and rollforward schedules that reconcile opening to closing balances.
- Select Transactions (25–35%). Complex transactions including long-term debt, leases under ASC 842, revenue recognition under the five-step ASC 606 model, stock compensation, income taxes, and pension and post-retirement benefit obligations.
Two topics inside Select Transactions deserve extra attention. ASC 606 revenue recognition walks through five steps: identify the contract, identify the performance obligations, determine the transaction price, allocate that price across obligations, and recognize revenue as each obligation is satisfied. ASC 842 lease accounting asks you to calculate carrying amounts for lease-related assets and liabilities and prepare journal entries from both the lessee and lessor side, including classification as operating or finance.
Consolidations show up as well. When a parent owns a subsidiary, you need to eliminate intercompany receivables, payables, sales, and unrealized gains, and for partially owned subsidiaries you handle minority interest and apply the elimination only to the parent’s ownership portion.
FAR also builds in data and technology tasks: verifying completeness and accuracy of source data, detecting discrepancies between financial statement amounts and supporting documentation, and preparing rollforward schedules from multiple data sources.5American Institute of CPAs. Uniform CPA Examination Blueprints 2026 These are embedded in the task-based simulations rather than standing alone.
Governmental and Not-for-Profit Accounting
The Blueprints state that FAR assesses foundational concepts in state and local governmental accounting under the Governmental Accounting Standards Board.6Governmental Accounting Standards Board. About the Governmental Accounting Standards Board Government questions do not carry their own allocation percentage; they are folded into the three content areas above. They appear often enough that skipping them is a gamble.
Government entities follow GASB standards rather than FASB rules, and the differences are substantial. Where private companies focus on profitability, governments emphasize fiscal accountability and legal compliance. You need to understand fund accounting (governmental, proprietary, and fiduciary funds) and how to prepare government-wide financial statements that reconcile fund-level data to the accrual basis. Candidates whose education focused entirely on corporate accounting usually find this the steepest learning curve on the exam.
Not-for-profit entities follow FASB standards but report differently from for-profits. FAR tests the two net asset classifications (with donor restrictions and without donor restrictions), the required statements (statement of financial position, statement of activities, and statement of functional expenses, which breaks costs down by both purpose and type), and the fact that nonprofit cash flow statements can use either the direct or indirect method.
Exam Format and Timing
FAR runs four hours and is split across five testlets:3AICPA & CIMA. Learn What Is Tested on the CPA Exam
- Testlet 1: 25 multiple-choice questions
- Testlet 2: 25 multiple-choice questions
- Testlet 3: 2 task-based simulations
- A standardized 15-minute break that does not count against your time
- Testlet 4: 3 task-based simulations
- Testlet 5: 2 task-based simulations
That is 50 MCQs and 7 TBSs in total. Not all of them count. Twelve of the MCQs and one TBS are pretest items the AICPA uses to evaluate future questions, and they look identical to scored items. Treat every question as if it counts, because you cannot tell which are which.
Task-based simulations are where FAR gets genuinely difficult. They present realistic scenarios (reconciling an account, drafting adjusting journal entries, working through emails and memos as exhibits), and some require you to research guidance within the FASB Codification. The TBSs test application rather than recall, which is why candidates who feel comfortable with MCQs often struggle here.
Breaks between testlets other than the standardized 15-minute break are optional, but the clock keeps running. Any unfinished testlet gets no credit for its uncompleted items. A common pacing plan is roughly 75 to 80 minutes for the two MCQ testlets combined, with the remaining time divided across the three simulation testlets.
Scoring and Pass Rates
You need a 75 on a 0 to 99 scale to pass. The score comes from a 50/50 weighted combination of MCQ and TBS performance.1AICPA & CIMA. Learn More About CPA Exam Scoring and Pass Rates Individual questions carry different weights based on their statistical difficulty, so two candidates who answer the same number of questions correctly can finish with different scores. The psychometric model adjusts for difficulty variation across testing windows.
FAR’s 2025 cumulative pass rate of 42.12% makes it one of the harder sections, and the volume of material (FASB, GASB, and not-for-profit standards together) is the main driver.1AICPA & CIMA. Learn More About CPA Exam Scoring and Pass Rates Candidates who spread their study across all content areas, rather than betting on heavily tested topics, tend to do better.
Scores release on a rolling basis roughly every two to three weeks. The AICPA publishes target dates tied to when it receives your exam data file.7AICPA & CIMA. Find Out When You’ll Get Your CPA Exam Score These targets occasionally shift but give you a reliable planning window.
Credit Window and Retakes
Passing FAR starts a clock. Most state boards currently require you to pass all remaining sections within 18 months of your first passing score, or you begin losing credit for sections already passed.8National Association of State Boards of Accountancy. CPA Exam FAQ In 2023, NASBA’s Board of Directors voted to extend this window to 30 months under its model rules, but individual state boards adopt the change on their own timeline. Some jurisdictions have already moved to 30 months; others are still on 18. Check your specific state board before assuming you have the longer window.
If you fail, continuous testing lets you retake FAR relatively quickly. You must wait at least 72 hours after receiving your score before re-registering, and you need a new Notice to Schedule (NTS) before booking a new appointment.9National Association of State Boards of Accountancy. CPA Exam Candidate Guide You cannot preemptively schedule a retake before your official score posts. There is no cap on the number of attempts.
Registration, Fees, and Scheduling
Registration runs through NASBA, which acts as the central clearinghouse for CPA candidates. Costs break into a state-level application fee (roughly $20 to $150 depending on jurisdiction) and a per-section exam fee of $262.64. All four sections in a single application cycle therefore run about $1,050 in exam fees, before any state-specific surcharges. Educational prerequisites (typically a bachelor’s degree plus 150 semester hours with an accounting concentration) must be satisfied through your state board before you can register, so verify your transcript qualifies before paying any fees.
Once credentials are verified, you receive an NTS by email authorizing you to sit for the sections you registered for. NTS validity varies by jurisdiction. Most boards set it at six months; some allow nine or twelve.9National Association of State Boards of Accountancy. CPA Exam Candidate Guide If your NTS expires before you sit, you forfeit the fees and must reapply. Each NTS section ID is valid for one testing appointment only.
After you have the NTS, you book your appointment through Prometric. FAR is available year-round under continuous testing, but popular dates fill quickly, especially around score release windows when candidates are eager to retake. Scheduling early gives you more flexibility on both dates and locations.
What to Expect on Test Day
Plan to arrive at the Prometric testing center at least 30 minutes before your scheduled time. Security is thorough. You will present a valid, unexpired government-issued photo ID, pass through a metal detector wand scan, and be asked to raise your pant legs above your ankles, empty and turn out all pockets, and raise your sleeves above your wrists.10Prometric. Prometric Testing Center Regulations Eyeglasses may be visually inspected for concealed recording devices. Large jewelry goes in a locker.
No personal items are allowed in the testing room. That means no watches, phones, food, drinks, notebooks, or outerwear. The center provides scratch paper or a notepad and writing instruments. Proctors monitor through cameras, and talking to other candidates or looking at their screens is grounds for immediate dismissal. If you leave the room for an unscheduled break, you go through the full security process again on return, and the exam clock keeps running.10Prometric. Prometric Testing Center Regulations
Violations (bringing unauthorized materials, leaving without permission, communicating with other candidates) can void your exam and trigger a report to your state board. Consequences vary by jurisdiction and may include a waiting period before you can retest.