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Exam Review

Key Facts: ACCA FR Exam

3 hrs

Computer-Based Exam

ACCA FR Exam Page

50%

Pass Mark

ACCA FR Examiner Approach

15 OTs

Section A Questions

ACCA FR Exam Structure

2 x 20

Section C Mark Questions

ACCA FR Exam Structure

IFRS 18

Replaced IAS 1 (Sep 2025)

ACCA Technical Article

4 areas

Syllabus Areas A-D

ACCA FR Syllabus S26-J27

ACCA FR is a 3-hour computer-based exam in three sections. Section A has 15 two-mark objective test questions; Section B has three case questions each with five two-mark OTs; Section C has two 20-mark constructed-response questions, one on preparing financial statements and one on interpretation. The pass mark is 50%. The syllabus covers area A (conceptual and regulatory framework, including IFRS 18 which replaced IAS 1 from September 2025), area B (accounting for transactions under IFRS), area C (analysing and interpreting financial statements) and area D (preparation of single-entity and group financial statements).

Sample ACCA FR Practice Questions

Try these sample questions to review concepts for the ACCA FR exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 165+ question experience with AI tutoring.

1According to the IASB Conceptual Framework, which two qualitative characteristics are the fundamental qualitative characteristics of useful financial information?
A.Relevance and faithful representation
B.Comparability and verifiability
C.Timeliness and understandability
D.Materiality and the exercise of prudence
Explanation: The Conceptual Framework identifies relevance and faithful representation as the two fundamental qualitative characteristics. Comparability, verifiability, timeliness and understandability are enhancing characteristics that increase usefulness once the fundamental ones are met.
2Under the IASB Conceptual Framework, an asset is defined as:
A.A resource owned by the entity that is expected to generate profit
B.A present economic resource controlled as a result of past events
C.Any item of value recorded in the entity's accounting records
D.A future inflow of cash that the entity expects to receive
Explanation: The 2018 Conceptual Framework defines an asset as a present economic resource controlled by the entity as a result of past events, where an economic resource is a right with the potential to produce economic benefits. Control, not legal ownership, is the key criterion.
3IFRS 18 Presentation and Disclosure in Financial Statements requires every item of income and expense to be classified into one of five categories. Which of the following is NOT one of those five categories?
A.Operating
B.Income taxes
C.Extraordinary
D.Financing
Explanation: IFRS 18 classifies income and expenses into five categories: operating, investing, financing, income taxes and discontinued operations. There is no extraordinary category; IFRS Accounting Standards have prohibited the presentation of extraordinary items since the 2003 revision of IAS 1.
4Under IFRS 18, which required subtotal comprises all of the income and expenses classified in the operating category?
A.Gross profit
B.Profit before financing and income taxes
C.Comprehensive income
D.Operating profit
Explanation: IFRS 18 requires an operating profit or loss subtotal, which is the total of all income and expenses classified in the operating category. Because operating is the residual category, the subtotal captures the results of the entity's main business activities.
5Which body is responsible for issuing International Financial Reporting Standards (IFRS Accounting Standards)?
A.The International Accounting Standards Board
B.The IFRS Interpretations Committee of the IASB
C.The IFRS Advisory Council
D.The IFRS Foundation Trustees
Explanation: The International Accounting Standards Board (IASB) is the independent standard-setting body that develops and issues IFRS Accounting Standards. The IFRS Foundation oversees governance, the Advisory Council gives strategic advice, and the Interpretations Committee issues IFRIC Interpretations.
6An entity recognises revenue when it satisfies a performance obligation. Under IFRS 15, control of a good or service is transferred over time if which of the following criteria is met?
A.The contract has a fixed, non-variable transaction price
B.The customer consumes the benefits as the entity performs
C.The entity retains legal title until it receives final payment
D.The asset created has an alternative use to the entity
Explanation: Under IFRS 15, a performance obligation is satisfied over time if the customer simultaneously receives and consumes benefits as the entity performs, or the entity creates/enhances an asset the customer controls, or the asset has no alternative use and the entity has an enforceable right to payment for performance to date.
7IFRS 15 sets out a five-step model for revenue recognition. What is the correct order of the first three steps?
A.Determine the transaction price; identify the contract; allocate the price
B.Identify the performance obligations; recognise revenue; identify the contract
C.Identify the contract; identify the performance obligations; determine the price
D.Allocate the transaction price; identify the contract; recognise revenue
Explanation: The IFRS 15 five-step model is: (1) identify the contract, (2) identify the separate performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the obligations, and (5) recognise revenue as each obligation is satisfied.
8A company sells a machine for $50,000 that includes two years of servicing. The standalone selling price of the machine is $44,000 and the servicing is $11,000. How much revenue is recognised for the machine on delivery under IFRS 15?
A.$50,000
B.$44,000
C.$39,000
D.$40,000
Explanation: The $50,000 transaction price is allocated by relative standalone selling prices. Total standalone price is $55,000, so the machine receives 44,000/55,000 x 50,000 = $40,000, recognised on delivery; the remaining $10,000 for servicing is recognised over two years.
9Under IAS 16 Property, Plant and Equipment, which of the following costs should be capitalised as part of the cost of an item of PPE?
A.Costs of site preparation and initial delivery
B.General administrative overheads
C.Costs of opening a new facility (advertising)
D.Operating losses incurred before the asset reaches planned performance
Explanation: IAS 16 includes directly attributable costs such as site preparation, delivery and handling, installation, and professional fees in the cost of PPE. Administrative overheads, advertising/promotion, and initial operating losses are specifically excluded and expensed.
10An asset costing $200,000 with a useful life of 10 years and no residual value is revalued to $270,000 at the start of year 3 (after two years of straight-line depreciation). What is the annual depreciation charge after revaluation?
A.$20,000
B.$33,750
C.$27,000
D.$30,000
Explanation: After two years' depreciation of $20,000 each, carrying amount is $160,000. On revaluation to $270,000 over the remaining 8 years, depreciation = 270,000 / 8 = $33,750 per year. Under IAS 16 depreciation is based on the revalued amount over remaining useful life.

About the ACCA FR Exam

ACCA Financial Reporting (FR) is an Applied Skills exam that develops the ability to apply IFRS Accounting Standards to transactions, prepare single-entity and group financial statements, and analyse and interpret financial statements.

Exam sponsor: ACCA (Association of Chartered Certified Accountants). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Question count not published by the exam provider

Time Limit

3 hours (computer-based exam)

Passing Score

50%

Exam / Certification Fees

ACCA Applied Skills exam entry fee varies by session and entry deadline; see the current ACCA exam fee schedule

Exam sponsor website

Reported exam pass rate: Published per session by ACCA. ACCA publishes FR pass rates by exam session; the last nine sittings ranged from 48% to 52% (June 2026 52%, March 2026 50%, December 2025 51%, September 2025 48%) Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

Area A

Conceptual and Regulatory Framework

The need for and characteristics of a conceptual framework, recognition and measurement, the regulatory framework, IFRS 18 presentation and disclosure, and the concepts and principles of consolidated financial statements.

Area B

Accounting for Transactions in Financial Statements

Applying IAS 16, IAS 38, IAS 36, IAS 2/IAS 41, IFRS 9/IAS 32, IFRS 16 leases, IAS 37 provisions, IAS 12 taxation, IFRS 15 revenue, IAS 20 grants and IAS 21 foreign currency to transactions.

Area C

Analysing and Interpreting Financial Statements

Calculating and interpreting profitability, liquidity, efficiency and gearing ratios, the IAS 7 statement of cash flows, and the limitations of ratio analysis for single entities and groups.

Area D

Preparation of Financial Statements

Preparing single-entity financial statements and consolidated financial statements for a non-complex group under IFRS 3, IFRS 10 and IAS 28, including goodwill, NCI and intra-group adjustments.

Area E

Employability and Technology Skills

Using the computer-based exam tools (spreadsheet and word-processing response areas) effectively, navigating the exam, and presenting answers professionally.

Preparing for the ACCA FR Exam

What You Need to Know

  • Passing score: 50%
  • Assessment: Question count not published by the exam provider
  • Time limit: 3 hours (computer-based exam)
  • Exam / certification fees: ACCA Applied Skills exam entry fee varies by session and entry deadline; see the current ACCA exam fee schedule Official sources

Using Our Practice Resources

  • Work through all 165 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

ACCA FR: Suggested Study Strategy

1Learn the FR ratios cold and practise interpreting them in words, because Section C rewards explanation, not just calculation.
2Drill consolidation workings (goodwill, NCI, intra-group eliminations and fair value adjustments) until they are second nature.
3Make sure you understand IFRS 18's new categories and required subtotals, as they replaced IAS 1 from September 2025.
4Practise IFRS 16 lease and IAS 12 deferred tax computations, two of the most commonly tested standards in Section B.
5Time yourself: Section A and B OTs need about 1.8 minutes each, leaving enough time for the two 20-mark Section C questions.
6Use an error log to record which standards and workings you get wrong, then re-practise them before exam day.

Frequently Asked Questions

How is the ACCA FR exam structured?

ACCA FR is a 3-hour computer-based exam in three sections. Section A has 15 two-mark objective test (OT) questions, Section B has three case questions each containing five two-mark OTs, and Section C has two 20-mark constructed-response questions, one on preparation and one on interpretation.

What is the pass mark for ACCA FR?

The pass mark for ACCA FR is 50%. Sections A and B are objective and marked automatically with no partial marks per OT, while Section C constructed-response answers are marked by ACCA examiners.

What standards are examinable in ACCA FR for 2025-26?

FR examines IFRS Accounting Standards including IAS 16, IAS 38, IAS 36, IAS 2, IFRS 9, IFRS 16, IAS 37, IAS 12, IFRS 15 and IAS 21. From September 2025, IFRS 18 Presentation and Disclosure replaced IAS 1 and is examinable, with new required subtotals such as operating profit.

Does ACCA FR include group accounting?

Yes. Syllabus area D requires preparation of consolidated financial statements for a non-complex group, covering goodwill, non-controlling interests, fair value adjustments and intra-group eliminations under IFRS 3, IFRS 10 and IAS 28.

How long should I study for ACCA FR?

Most candidates spend around 150 study hours or more preparing for FR, typically over 8 to 14 weeks part-time. Practising full Section A, B and C questions under timed conditions is essential because Section C requires speed and accuracy.

Is ACCA FR the same as the old F7 paper?

Yes. Financial Reporting (FR) is the current name for the exam previously coded F7 within the ACCA Qualification's Applied Skills level. The exam reference is sometimes still written as ACCA F7.

What changed with IFRS 18 in ACCA FR?

IFRS 18 replaced IAS 1 from September 2025. It classifies income and expenses into operating, investing and financing categories, introduces required subtotals including operating profit and profit before financing and income taxes, and adds disclosure of management-defined performance measures.

Can I take ACCA FR remotely?

FR is delivered as a computer-based exam at ACCA-approved centres, and remote-proctored sittings are available in many locations. Availability and on-demand versus session sittings depend on your region and ACCA's current delivery options.