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100+ Free ICAEW ACA FAR Practice Questions
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When the parent disposes of part of its holding but retains control of the subsidiary, the difference between the consideration received and the adjustment to NCI is:
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2026 Statistics
Key Facts: ICAEW ACA FAR Exam
3 hours
Exam Length
ICAEW FAR Exam Resources
55%
Pass Mark
ICAEW FAR Exam Resources
4
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 test your ICAEW ACA FAR exam readiness. 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 Practice Questions
Verified exam format metadata for ICAEW ACA Professional Level - Financial Accounting and Reporting (FAR) is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.