Lumenary Prep

Uniform CPA Examination, Financial Accounting and Reporting (Core section)

CPA Exam: Financial Accounting and Reporting (FAR)

U.S. GAAP for business, nonprofit and government entities, with the journal entries worked out.

AI-drafted · awaiting expert reviewThe FAR section of the Uniform CPA Examination as defined by the AICPA's Uniform CPA Examination Blueprints effective January 1, 2026 (approved by the Board of Examiners on August 18, 2025), for the 2026 testing year. The Blueprints effective January 1, 2027 (approved September 16, 2026) make no change to FAR's areas, weights or tasks (they only add NCGA Statements and Interpretations to the state and local government references), so the course serves 2027 candidates too. Accounting content is U.S. GAAP eligible for testing under the AICPA's policy on new pronouncements as of November 2026; standards issued but not yet eligible (for example ASU 2024-03 and ASU 2025-06) are named as such. The AICPA has announced a new exam delivery platform from July 2027. Exam facts verified on aicpa-cima.com and nasba.org, and accounting rules on fasb.org, gasb.org, sec.gov and ecfr.gov, on 9 November 2026.

A complete, original course for the Financial Accounting and Reporting (FAR) section of the CPA Exam. Twenty-seven lessons follow the AICPA's FAR blueprint area by area and in proportion to its weights: financial reporting for business and not-for-profit entities (the statements, notes, consolidations, public-company reporting and earnings per share, special purpose frameworks, ratios, and the government concepts FAR keeps), select balance sheet accounts (cash, receivables, inventory, property and equipment, intangibles and software, investments, payables, debt and equity), and select transactions (revenue and contributions, accounting changes and errors, contingencies and subsequent events, income taxes, fair value and lessee accounting). Every lesson teaches the rule with its exceptions, shows the journal entries and computations, flags the traps, and ends with a self-check; practice questions come with full explanations, and simulation-style case sets ask for typed amounts as the exam does. A full-length practice exam mirrors FAR's 50 multiple-choice questions and 7 task-based simulations. Built only from official sources: the AICPA's blueprint and exam pages, NASBA, the FASB's Codification, Accounting Standards Updates and Concepts Statements, GASB statements, and the SEC's forms and rules, explained in our own words. Use it alongside the AICPA's free sample test.

About the exam

Syllabus

27 lessons, 276 practice questions and 1 timed practice exam.

Getting Started

  1. The FAR section and the foundations of GAAP

    How the CPA Exam and its FAR section are built, timed and scored; how to study the blueprint; then the conceptual framework and who sets U.S. accounting standards for businesses, not-for-profits, governments and SEC registrants.

    1. The FAR section and the whole CPA ExamFree sample35 min
    2. Standard setting, the Codification and the conceptual framework(included with the course)40 min

Area I: Financial Reporting (30–40%)

  1. General-purpose financial statements of business entities

    The classified balance sheet and the notes, the income statement (including discontinued operations and foreign currency transaction gains and losses), comprehensive income, the statement of changes in equity, the statement of cash flows, and consolidated statements with noncontrolling interests.

    1. The classified balance sheet and the notes(included with the course)50 min
    2. Income statement, comprehensive income and changes in equity(included with the course)55 min
    3. Statement of cash flows(included with the course)55 min
    4. Consolidated financial statements(included with the course)60 min

  2. Not-for-profit financial statements

    The statements of financial position, activities and cash flows of a nongovernmental not-for-profit entity: net assets with and without donor restrictions, releases from restriction, expenses by nature and function, and liquidity disclosures.

    1. Financial statements of not-for-profit entities(included with the course)55 min

  3. State and local government concepts

    The foundations FAR tests for governments: measurement focus and basis of accounting in government-wide and fund statements, and which fund records which activity.

    1. State and local government concepts(included with the course)45 min

  4. Public company reporting topics

    Forms 10-K, 10-Q and 8-K under the Securities Exchange Act of 1934, their deadlines and key items, Regulations S-X and S-K, and basic and diluted earnings per share.

    1. SEC reporting and earnings per share(included with the course)60 min

  5. Special purpose frameworks

    Cash, modified cash and income tax basis financial statements: their titles, how to prepare them, and how to convert cash-basis amounts to accrual.

    1. Special purpose frameworks(included with the course)45 min

  6. Ratios and performance metrics

    Profitability, liquidity and solvency ratios, performance metrics such as EBITDA and the price-earnings ratio, and budget-to-actual variances.

    1. Ratios, performance metrics and budget variances(included with the course)45 min

Area II: Select Balance Sheet Accounts (30–40%)

  1. Cash and receivables

    Cash and cash equivalents, bank reconciliations, trade receivables and the allowance for expected credit losses, sales returns, rollforwards, and transfers of receivables (factoring, pledging, assignment, secured borrowing).

    1. Cash and receivables(included with the course)60 min

  2. Inventory

    Cost flow methods (specific identification, FIFO, LIFO, average cost), lower of cost and net realizable value and lower of cost or market, rollforwards, and reconciling the subledger to the general ledger.

    1. Inventory(included with the course)60 min

  3. Property, plant and equipment and intangible assets

    Cost, depreciation, disposals, impairment and held-for-sale assets; recognition, amortization and impairment of intangible assets, with internal-use software and cloud computing arrangements.

    1. Property, plant and equipment(included with the course)60 min
    2. Intangible assets, purchased software and cloud computing(included with the course)50 min

  4. Investments

    Equity securities at fair value, debt securities classified as trading, available for sale or held to maturity, credit losses on debt securities, and the equity method.

    1. Investments in debt and equity securities(included with the course)55 min
    2. Equity method investments(included with the course)45 min

  5. Payables and accrued liabilities

    Accounts and dividends payable, accrued wages, vacation, bonuses and self-insurance, exit or disposal cost obligations, and asset retirement obligations.

    1. Payables, accrued liabilities, exit costs and asset retirement obligations(included with the course)55 min

  6. Notes and bonds payable

    Issuing debt at a premium or discount, the effective interest method, debt issuance costs, extinguishment versus modification, troubled debt restructurings by debtors, and debt covenant calculations.

    1. Notes and bonds payable, modifications and covenants(included with the course)60 min

  7. Equity

    Issuing stock, treasury stock, stock dividends and splits, cash and property dividends, and capital accounts in partnerships and other pass-through entities.

    1. Equity transactions(included with the course)50 min

Area III: Select Transactions (25–35%)

  1. Revenue recognition and contributions

    The five-step model for revenue from contracts with customers, contract costs, and how a not-for-profit recognizes contributions, pledges, contributed services and transfers it receives only as an agent.

    1. Revenue recognition: the five-step model and contract costsFree sample60 min
    2. Contributions received by not-for-profit entities(included with the course)50 min

  2. Accounting changes and error corrections

    Changes in accounting principle and in reporting entity (retrospective), changes in estimate (prospective), and corrections of errors (restatement).

    1. Accounting changes and error corrections(included with the course)55 min

  3. Contingencies, commitments and subsequent events

    When a loss contingency is accrued, disclosed or neither; gain contingencies; commitments; and recognized versus nonrecognized subsequent events.

    1. Contingencies, commitments and subsequent events(included with the course)55 min

  4. Income taxes

    Current and deferred tax, temporary and permanent differences, valuation allowances, uncertain tax positions, enacted rate changes and the journal entry for the tax provision.

    1. Accounting for income taxes(included with the course)60 min

  5. Fair value measurement

    The exit-price definition of fair value, market participants, the principal market, highest and best use, valuation approaches and the three-level hierarchy.

    1. Fair value measurement(included with the course)45 min

  6. Lessee accounting

    Classifying a lease as finance or operating, measuring the lease liability and right-of-use asset, residual value guarantees, purchase options, variable payments and lease cost.

    1. Lessee accounting(included with the course)60 min

Practice exams

  • FAR Practice Exam 1 (full length)83 questions · 240 minutesIncluded with the course

Free official resources

Use these alongside the course. They are free, and they are the final word.

  • Uniform CPA Examination Blueprints (AICPA)The authoritative list of what FAR tests: areas, groups, topics, representative tasks, skill levels and references, for 2026 and 2027, with the policy on new pronouncements. Read the FAR pages before you start and again before test day.
  • CPA Exam sample tests (AICPA, free)Free, unscored sample tests for every section, in the exam's own software, with answers you can view. Use them to learn the testlet navigation, the spreadsheet and the simulation formats; their content is current as of July 1, 2023, so rely on this course for current rules.
  • Accessible CPA Exam sample tests (AICPA)Versions of the sample tests for candidates who use screen readers or magnifiers.
  • Retired FAR task-based simulation (AICPA, free)A real, retired FAR simulation with all its exhibits and the AICPA's step-by-step guidance, on finding and correcting misstatements in account balances. Work it after the balance sheet and error-correction lessons.
  • CPA Exam Candidate Guide (NASBA)Applying, scheduling, what to bring, test-day rules, breaks, score release and retakes. Read it before you apply.
  • Choose your jurisdiction (NASBA)Eligibility, fees and credit rules vary by jurisdiction; start your application from your board's page here.
  • CPA Exam score release dates (AICPA)Target score release dates for Core and Discipline sections, and the adjusted schedule for the July 2027 platform change.
  • FASB Accounting Standards CodificationThe authoritative source of U.S. GAAP for nongovernmental entities, online and organized by Topic number. Practise finding Topics and Subtopics by number, since FAR's research tasks use excerpts of the Codification.
  • FASB Conceptual Framework (Concepts Statement No. 8)All eight chapters of the FASB's conceptual framework in one document: objective, reporting entity, qualitative characteristics, elements, recognition, measurement, presentation and notes.
  • SEC Forms 10-K, 10-Q and 8-KThe SEC's own form instructions: filing deadlines by filer category and the items each report contains (see also sec.gov/files/form10-q.pdf and sec.gov/files/form8-k.pdf).

Lumenary Prep is not affiliated with or endorsed by the AICPA, NASBA or any state board of accountancy. Only a state board of accountancy grants the CPA license. The AICPA's blueprints and standards, and the FASB's, GASB's, PCAOB's and COSO's materials, are copyrighted: this course explains them in its own words and links to the official text. Every source this course cites.