Learn how to prepare for the CPA FAR exam as an Indian candidate. Covers FAR syllabus, pass rates, difficult topics, study strategies, costs in INR, and exam scheduling tips. This article is written by Rohit Arora, Senior Associate at LawSikho.

The Financial Accounting and Reporting (FAR) section of the CPA exam has earned its reputation as the most demanding Core section, with pass rates hovering around 42 to 43 percent in recent years. 

For Indian candidates juggling exam preparation with demanding jobs, FAR presents a unique challenge because it tests US GAAP standards and governmental accounting concepts that are completely absent from Indian commerce education. However, your B.Com, M.Com, or CA background gives you a genuine advantage in financial statement preparation and complex calculations. 

This guide breaks down exactly what FAR covers, why it trips up so many candidates, and how you can prepare efficiently to pass on your first attempt.

What is the FAR CPA Exam and What Does It Test?

Understanding FAR’s Role in the CPA Exam Structure

Under the CPA Evolution model launched in January 2024, every CPA candidate must pass three Core sections before earning their license. 

These Core sections are 

• Financial Accounting and Reporting (FAR), 
• Auditing and Attestation (AUD), and 
• Taxation and Regulation (REG). 

After clearing all three Core sections, you select and pass one Discipline section from Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP). 

FAR serves as the accounting foundation because the financial reporting knowledge it tests underpins everything else you will do as a CPA.

The FAR exam is a four-hour computer-based test consisting of five testlets. 

The first two testlets contain 25 multiple-choice questions (MCQs) each, giving you 50 MCQs total. The remaining three testlets contain seven task-based simulations (TBSs) distributed as 2, 3, and 2 simulations, respectively. 

Your score combines MCQ and TBS performance equally, with each component contributing 50 percent to your final score. To pass, you need a scaled score of 75 or higher on the 0 to 99 scale, which is not a percentage but a competency measure set by the AICPA.

If you choose BAR as your Discipline section, your FAR knowledge becomes even more critical because BAR builds directly on FAR content with more advanced technical accounting topics. This connection makes mastering FAR doubly important for candidates interested in financial reporting career paths.

Complete FAR Syllabus Overview

The FAR syllabus is divided into three content areas, each with specific weightings that determine how many questions you will face from each topic. Area I covers Financial Reporting and comprises 30 to 40 percent of the exam. 

This area tests your knowledge of preparing and analyzing financial statements for for-profit businesses, not-for-profit organizations, and state and local governments. You need to understand the conceptual framework under FASB standards, public company disclosure requirements under SEC rules, and governmental accounting under GASB standards.

Area II focuses on Select Balance Sheet Accounts and also comprises 30 to 40 percent of the exam. Topics include cash and cash equivalents, trade receivables and the allowance method, inventory costing (including FIFO, LIFO, and weighted average), property, plant and equipment, intangible assets, investments, payables and accrued liabilities, long-term debt including bonds, and equity transactions. Most of these topics will feel familiar from your Indian accounting education, though US GAAP treatment has specific differences you must learn.

Area III covers Select Transactions and comprises 25 to 35 percent of the exam. This area includes revenue recognition under ASC 606, lease accounting under ASC 842, accounting for income taxes under ASC 740, fair value measurements, contingencies and commitments, accounting changes and error corrections, and subsequent events. Revenue recognition and lease accounting are heavily tested and require mastery of multi-step calculations. The income tax section involves deferred tax assets and liabilities, which many candidates find conceptually challenging.

FAR Pass Rates and Difficulty Analysis

Current FAR Pass Rate Statistics (2024-2025)

FAR consistently records the lowest pass rate among the three Core sections, making it statistically the hardest section to clear. 

In 2024, the cumulative FAR pass rate was approximately 40.59 percent, with quarterly rates ranging from 36.80 percent in Q4 to 41.92 percent in Q1. The fourth quarter dip is common across CPA exam sections and likely reflects candidate fatigue during the holiday season. For comparison, REG regularly achieves pass rates above 60 percent, highlighting how much tougher FAR is relative to other sections.

The 2025 data shows modest improvement. Q1 2025 recorded a 41.67 percent pass rate, while Q2 2025 improved slightly to 43.52 percent, bringing the cumulative 2025 rate to approximately 42.66 percent through mid-year. 

This improvement suggests candidates are adapting to the CPA Evolution format, but FAR remains significantly more difficult than other sections. These numbers mean that more than half of the candidates who sit for the FAR do not pass on their first attempt, so rigorous preparation is essential.

What do these statistics mean for your preparation? 

• First, respect the exam and allocate sufficient study time. 
• Second, do not assume your Indian qualifications guarantee success because the FAR tests US-specific content you have never encountered. 
• Third, take comfort in knowing that with proper preparation, you can absolutely be among the candidates who pass. 

The pass rate reflects overall candidate performance, including those who underprepare, not the inherent impossibility of the exam.

Most Challenging FAR Topics for Indian Candidates

Governmental accounting under GASB standards is unanimously identified as the most difficult FAR topic, and this challenge is amplified for Indian candidates who have zero prior exposure. 

Government accounting uses fund accounting, where activities are segregated into separate self-balancing sets of accounts based on purpose and restrictions. You need to understand governmental funds, proprietary funds, and fiduciary funds, plus the difference between government-wide statements (accrual basis) and fund statements (modified accrual basis). The reconciliation between these two statement types is frequently tested and requires careful study.

Not-for-profit accounting presents similar challenges because Indian education does not cover NFP reporting requirements. You must learn net asset classifications (with and without donor restrictions), contribution accounting, and how to prepare statements of activities and functional expenses. While NFP accounting is less extensive than governmental accounting, candidates who neglect it often lose easy points on what could be straightforward questions with proper preparation.

Beyond unfamiliar content areas, Indian candidates must navigate differences between Ind AS and US GAAP. 

LIFO inventory valuation is permitted under US GAAP but prohibited under Ind AS, so you need to learn this method from scratch. Impairment testing follows different procedures, and bond accounting terminology has US-specific conventions. Pension accounting, consolidations, and business combinations round out the list of challenging topics. The common thread is that these areas require deep understanding and multi-step calculations where errors compound quickly.

FAR Preparation Strategy for Indian Working Professionals

Study Hours, Timeline, and Review Course Selection

Most successful FAR candidates invest between 100 to 150 hours of focused study time. 

Indian CA holders with strong financial accounting backgrounds may manage with 100 hours, while B.Com graduates without extensive work experience might need 150 hours or more. If you are working full-time, plan for a 10 to 12 week preparation period, dedicating 12 to 15 hours weekly through a combination of weekday evenings and weekend study sessions. Cramming FAR into four or five weeks rarely works because the content volume requires time for concepts to sink in.

Choosing the right CPA review course significantly impacts your preparation quality. Major providers include Becker, Wiley, Surgent, and Gleim, with prices ranging from approximately ₹80,000 to ₹2,00,000 for full four-section access. 

Becker offers comprehensive content with strong pass rates but premium pricing. Wiley provides unlimited access until you pass, which suits candidates who might need extra time. 

Surgent uses adaptive technology to customize your study plan based on performance, while Gleim offers extensive practice questions at more affordable rates. 

In addition to these, candidates can also consider the SkillArbitrage “CPA Prep & Global Finance Career Acceleration Program,” a structured 6-month, instructor-led online course (≈ 8–10 hrs/week) covering all four exam sections — FAR, REG, AUD, and BEC — along with US-GAAP accounting, auditing, U.S. tax, costing/IT, exam strategy, and post-CPA career guidance. Priced around ₹120,000, the program includes live classes, assignments, mobile and desktop LMS access, regular mock exams, mentor feedback, and a certificate co-branded with the National Skill Development Corporation (NSDC).

When selecting a course, prioritize strong governmental accounting coverage because this is where most Indian candidates struggle. 

Check that the course includes sufficient practice TBSs, not just MCQs, since simulations comprise half your score. Consider access duration carefully because some courses expire after 12 to 18 months, and you want flexibility if you need to retake the exam.

Effective Study Techniques for FAR Success

Start your preparation with the topics you find most challenging, particularly governmental and not-for-profit accounting. 

Many candidates make the mistake of beginning with familiar topics like financial statements and running out of time for unfamiliar content. By tackling governmental accounting early, you give yourself time to revisit these concepts multiple times before exam day. Treat governmental accounting as a completely separate subject requiring dedicated study sessions rather than something to squeeze in at the end.

Active practice is essential for FAR success.

Aim to complete at least 1,500 MCQs and 50 TBSs during your preparation, reviewing explanations for both correct and incorrect answers. The exam tests application and analysis skills, so you need practice applying concepts to scenarios rather than just memorizing rules. For calculation-heavy topics like bonds, leases, and pensions, work through problems repeatedly until the steps become automatic. Create summary notes for complex topics that you can review in the final week before your exam.

Time management during the exam matters more for FAR than other sections because of the calculation load. 

Allocate approximately 50 to 55 minutes for each MCQ testlet (about 2 minutes per question) and distribute remaining time across TBSs. Take the full 15-minute break after testlet three to reset mentally before tackling simulations. Practice with timed exams during your preparation to develop a comfortable pace, and use the flag feature to mark uncertain questions for review rather than getting stuck on any single problem.

FAR Exam Costs and Scheduling for Indian Candidates

Total Investment Breakdown in Indian Rupees

Understanding the complete cost picture helps you budget appropriately and avoid surprises. 

Credential evaluation through agencies like WES or NIES costs between ₹12,750 and ₹30,000 depending on the service level and processing speed you select. 

The exam application fee varies by state but typically ranges from ₹8,500 to ₹17,000. The FAR section fee itself costs approximately ₹17,000 to ₹21,000, and you will pay this amount again if you need to retake the exam.

Your CPA review course represents the largest expense. 

If you purchase section-specific access for FAR only, expect to pay ₹25,000 to ₹50,000 depending on the provider. Full four-section access costs ₹80,000 to ₹2,00,000 but offers better value if you plan to complete the entire CPA exam. 

Additional study materials like supplementary question banks or flashcards might add ₹5,000 to ₹15,000. Combining all costs, your total FAR preparation investment ranges from approximately ₹85,000 to ₹1,50,000, with potential for additional retake fees if needed.

Scheduling FAR at Prometric India and Exam Sequencing

Most CPA exam experts recommend taking FAR as your first section, and this advice holds especially true for Indian candidates. The primary advantage is timing: by tackling FAR first, you can study as long as you need without worrying about the 30-month clock that starts once you pass your first section. 

If FAR is your first pass, you have a full 30 months to complete the remaining three sections. Additionally, clearing the hardest section first builds confidence and establishes strong study habits for subsequent exams.

After receiving your Notice to Schedule (NTS) from NASBA, book your FAR exam through the Prometric website. India has testing centers in major cities including Mumbai, Delhi, Bangalore, Hyderabad, Chennai, and Kolkata. Schedule your exam at least four to six weeks in advance to secure your preferred date and time slot, especially during peak testing periods. 

Morning appointments are popular among candidates who want to test while mentally fresh. Arrive at the testing center at least 30 minutes early to complete check-in procedures without stress.

Conclusion

FAR demands respect, but it is absolutely conquerable with the right approach. Your Indian commerce or CA background provides genuine advantages in financial statement preparation, calculations, and working through complex multi-step problems. 

The challenge lies in US-specific content, particularly governmental accounting and US GAAP nuances, which require dedicated study time regardless of your prior qualifications.

Focus your preparation on unfamiliar topics early, invest in a quality review course with strong governmental accounting coverage, and practice extensively with both MCQs and TBSs. Budget 100 to 150 hours over 10 to 12 weeks, and take FAR as your first section to maximize flexibility. 

With disciplined preparation and strategic time management on exam day, you can join the thousands of Indian professionals who have successfully cleared FAR and moved forward in their CPA journey.

If you are looking for an in-depth guide on preparation strategy and syllabus for FAR, then I highly recommend you read my article on CPA Exam FAR Section: Syllabus, Difficulty, and Preparation Strategy for Indian Candidates

Serato DJ Crack 2025Serato DJ PRO Crack