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Exam Review

Key Facts: ICAEW ACA FAR Exam

3 hours

Exam Length

ICAEW FAR Exam Resources

55%

Pass Mark

ICAEW FAR Exam Resources

Long-Form Questions

ICAEW FAR Exam Resources

~60%

Single-Entity Weighting

ICAEW ACA Syllabus

~30%

Group Accounts Weighting

ICAEW ACA Syllabus

Sep 2026

Final FAR Syllabus Sitting

Next Generation ACA

ICAEW ACA FAR is a 3-hour computer-based written exam with four long-form questions and a 55% pass mark. It covers accounting and reporting concepts and ethics (about 10%), single-entity financial statements under IFRS or UK GAAP (about 60%), and consolidated group financial statements (about 30%). Key standards include IFRS 9, IFRS 15, IFRS 16, IAS 12, IAS 1 and IFRS 10. The existing FAR syllabus has its final sitting in September 2026; under Next Generation ACA from March 2026, FAR merges with Audit and Assurance into two hybrid Reporting and Audit exams. This free bank builds technical knowledge with 100 MCQs before long-form practice.

Sample ICAEW ACA FAR Practice Questions

Try these sample questions to review concepts for the ICAEW ACA FAR exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under the IASB Conceptual Framework (2018), which of the following is identified as the objective of general purpose financial reporting?

A.To provide financial information useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity

B.To calculate the taxable profit of the entity for the reporting period

C.To ensure the entity complies with company law in its jurisdiction

D.To value the entity's net assets at their current market price

Explanation: The Conceptual Framework states that the objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions relating to providing resources to the entity.

2The Conceptual Framework identifies two fundamental qualitative characteristics of useful financial information. Which pair is correct?

A.Comparability and timeliness

B.Relevance and faithful representation

C.Verifiability and understandability

D.Prudence and going concern

Explanation: The two fundamental qualitative characteristics are relevance and faithful representation. Comparability, verifiability, timeliness and understandability are the four enhancing qualitative characteristics.

3According to the Conceptual Framework, an asset is recognised in the financial statements only when which of the following conditions is met?

A.The entity holds legal title to the item

B.Recognition provides users with relevant information and a faithful representation, considering cost constraints

C.The item has a readily determinable market value

D.The item was purchased for cash during the period

Explanation: Under the revised recognition criteria, an item is recognised if doing so provides users with relevant information and a faithful representation of the asset, subject to the cost constraint. The old 'probable inflow' threshold was removed.

4The ICAEW Code of Ethics is based on five fundamental principles. A chartered accountant who deliberately overstates revenue to meet a profit target would primarily breach which principle?

A.Confidentiality

B.Professional behaviour only

C.Integrity

D.Professional competence and due care only

Explanation: Integrity requires members to be straightforward and honest in all professional and business relationships. Deliberately overstating revenue is a dishonest act and therefore primarily breaches integrity (objectivity is also compromised).

5Under IAS 8, a change from the FIFO to the weighted average cost formula for measuring inventory is treated as which of the following?

A.A change in accounting estimate, applied prospectively

B.A change in accounting policy, applied retrospectively

C.A prior period error, corrected by restating opening retained earnings only

D.A change requiring disclosure but no adjustment to the figures

Explanation: Selecting a cost formula is an accounting policy. A voluntary change in accounting policy under IAS 8 is applied retrospectively, adjusting comparatives and opening retained earnings as if the new policy had always applied.

6Which statement best describes the purpose of the IFRS Foundation and the International Accounting Standards Board (IASB)?

A.The IASB enforces IFRS in every jurisdiction worldwide

B.The IFRS Foundation oversees the IASB, which develops and issues IFRS Accounting Standards

C.The IASB sets UK company law disclosure requirements

D.The IFRS Foundation audits the financial statements of listed companies

Explanation: The IFRS Foundation is the not-for-profit body that oversees the IASB. The IASB is the independent standard-setting body responsible for developing and issuing IFRS Accounting Standards.

7An entity discovers that depreciation was omitted on a building in the previous financial year due to a clerical mistake. Under IAS 8, how should this be accounted for in the current year's financial statements?

A.As a change in accounting estimate, adjusting the current year only

B.As a prior period error, restating the comparative figures and opening retained earnings

C.By recognising a catch-up expense in current year profit or loss

D.By disclosing the matter in the notes with no numerical adjustment

Explanation: An omission resulting from a mistake is a prior period error. IAS 8 requires material prior period errors to be corrected retrospectively by restating the comparative amounts and the opening balance of retained earnings.

8A chartered accountant preparing accounts is offered a substantial gift by a client who wants a more favourable presentation of liquidity. Which threat to the fundamental principles is most directly created?

A.Familiarity threat

B.Self-interest threat

C.Advocacy threat

D.Intimidation threat

Explanation: A gift creates a self-interest threat, where a financial or other interest inappropriately influences the accountant's judgement, undermining objectivity and integrity. Safeguards such as declining the gift should be applied.

9Under the Conceptual Framework, which measurement basis reflects the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date?

A.Current cost

B.Historical cost

C.Value in use

D.Fair value

Explanation: Fair value is a current value measurement basis defined as the price that would be received to sell an asset (or paid to transfer a liability) in an orderly transaction between market participants at the measurement date.

10The going concern assumption underlying the preparation of financial statements means that the financial statements are prepared on the basis that the entity:

A.Will be liquidated within twelve months

B.Will continue in operation for the foreseeable future

C.Measures all assets at their break-up values

D.Recognises no liabilities until they are legally due

Explanation: Going concern assumes the entity will continue in operation for the foreseeable future and has neither the intention nor the need to liquidate or curtail materially the scale of its operations. This justifies non-break-up measurement bases.

About the ICAEW ACA FAR Exam

ICAEW ACA Financial Accounting and Reporting (FAR) is a Professional Level module assessing the preparation, presentation and explanation of single-entity and consolidated financial statements under IFRS (or UK GAAP), tested through a 3-hour written exam with a 55% pass mark.

Exam sponsor: Institute of Chartered Accountants in England and Wales (ICAEW). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Performance-based assessment

Time Limit

3 hours

Passing Score

55%

Exam / Certification Fees

FAR module exam fee plus annual ICAEW student registration, per the current ICAEW fees schedule

Exam sponsor website

Reported exam pass rate: Published per session by ICAEW. ICAEW publishes a FAR pass rate for each exam session. The existing FAR syllabus has its final sitting in September 2026 before Next Generation ACA changes take effect. Exam sponsor website

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

Official sources

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.

~10%

Accounting and reporting concepts and ethics

The IASB Conceptual Framework, qualitative characteristics, recognition and measurement, the regulatory framework, IAS 8 accounting policies and errors, and the ICAEW Code of Ethics fundamental principles, threats and safeguards.

~60%

Single-entity financial statements (IFRS or UK GAAP)

Preparation and presentation of the single-entity income statement, statement of financial position and cash flows, applying IAS 1, IAS 2, IAS 7, IAS 12, IAS 16, IAS 36, IAS 37, IAS 38, IFRS 9, IFRS 15 and IFRS 16.

~30%

Consolidated and group financial statements

Preparation of consolidated financial statements for groups with subsidiaries, associates and joint arrangements, applying IFRS 3, IFRS 10, IFRS 11, IFRS 12, IAS 28 and related consolidation adjustments.

Preparing for the ICAEW ACA FAR Exam

What You Need to Know

Passing score: 55%
Assessment: Performance-based assessment
Time limit: 3 hours
Exam / certification fees: FAR module exam fee plus annual ICAEW student registration, per the current ICAEW fees schedule Official sources

Using Our Practice Resources

Work through all 100 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

ICAEW ACA FAR: Suggested Study Strategy

1Practise full single-entity preparations from a trial balance, because Question 1 is heavily computational and rewards a methodical proforma approach.

2Drill consolidation workings (goodwill, NCI, intra-group eliminations and fair value adjustments) until they are second nature, as groups carry roughly 30% of the syllabus.

3Allow about 1.8 minutes per mark and move on when time is up, then return to incomplete parts at the end.

4Learn to identify which IFRS applies quickly; the open-book standards help with detail but not with recognising the issue.

5For written parts, explain why a treatment applies, not just the number, since marks are awarded for reasoning.

6Use this MCQ bank to confirm the underlying IFRS knowledge before practising past long-form questions to time.

Frequently Asked Questions

How long is the ICAEW ACA FAR exam and what is the pass mark?

The Financial Accounting and Reporting exam is 3 hours long and has a pass mark of 55%. It is a computer-based written paper made up of four long-form questions worth 100 marks in total.

Is the ICAEW ACA FAR exam multiple choice?

No. FAR is a long-form written exam of four questions involving the preparation of single-entity and consolidated financial statements and written explanation of IFRS application. This free bank uses multiple-choice questions to build the underlying technical knowledge.

What does the ICAEW ACA FAR syllabus cover?

FAR covers accounting and reporting concepts and ethics (about 10%), single-entity financial statements under IFRS or UK GAAP (about 60%), and consolidated group financial statements (about 30%), including standards such as IFRS 9, IFRS 15, IFRS 16, IAS 12, IAS 1 and IFRS 10.

What is the difference between FAR IFRS and FAR UK GAAP?

ICAEW offers FAR in two routes, FAR: IFRS and FAR: UK GAAP, applying the same financial reporting concepts under different frameworks. The UK GAAP variant is being removed under Next Generation ACA.

How is FAR changing under Next Generation ACA?

The existing FAR syllabus has its final sitting in September 2026. Under Next Generation ACA, effective for Professional Level from March 2026, FAR merges with Audit and Assurance into two hybrid Reporting and Audit exams.

How much time should I allow per mark in the FAR exam?

ICAEW guidance suggests allowing about 1.8 minutes for each of the 100 marks available, so a 25-mark question should take roughly 45 minutes including planning and review.

Can I take reference materials into the FAR exam?

Yes. The FAR: IFRS exam is open-book in respect of the International Financial Reporting Standards, so candidates can refer to the permitted standards during the exam.

Which accounting standards are most heavily tested in FAR?

Single-entity questions frequently test IAS 1, IAS 16, IAS 36, IAS 37, IAS 38, IFRS 9, IFRS 15 and IFRS 16, while group questions focus on IFRS 3, IFRS 10, IFRS 11, IFRS 12 and IAS 28.