CPA FAR: Accounting changes, contingencies, fair value and subsequent events
Blueprint III.A, III.B, III.E, III.G · Area III, Select Transactions · 25–35% of FAR
Ten FAR questions on accounting changes, contingencies, fair value and subsequent events, untimed, with a reason for every answer option.
Or take the full FAR mock examDuring Year 3, before closing the books, Lowe Co. finds that its Year 1 ending inventory was overstated by $10,000. The Year 2 books are closed. Ignoring taxes, what adjustment to retained earnings at January 1, Year 3 is needed?
Accounting changes, contingencies, fair value and subsequent events on CPA FAR
The rest of Area III tests accounting changes and error corrections, contingencies and commitments, fair value measurement and subsequent events: questions about which period a number belongs in and whether to recognize or disclose.
- Blueprint groups
- III.A, III.B, III.E, III.G
- Share of the section
- Area III, Select Transactions: 25–35%
- Our drill
- 10 questions from 11 on this topic, untimed, with a reason for every option; one free attempt, unlimited with a pass
What to know
- Changes in accounting principle are applied retrospectively; changes in estimate prospectively; a change in depreciation method is a change in estimate effected by a change in principle (ASC 250-10-45-5, 45-17 and 45-18).
- Errors in issued statements are corrected by restating prior periods, adjusting opening retained earnings of the earliest period presented (ASC 250-10-45-23).
- Accrue a loss contingency that is probable and reasonably estimable; when no amount in a range is better, accrue the minimum and disclose the rest (ASC 450-20-25-2 and 30-1).
- Gain contingencies are not recognized until realized (ASC 450-30-25-1).
- Fair value is an exit price; Level 1 inputs are quoted prices for identical items in active markets, Level 2 other observable inputs, Level 3 unobservable inputs (ASC 820-10-35).
- Subsequent events that give evidence of conditions at the balance sheet date are recognized; those arising later are disclosed (ASC 855-10-25-1 and 25-3).
Test yourself on accounting changes, contingencies, fair value and subsequent events
Ten FAR questions on accounting changes, contingencies, fair value and subsequent events, untimed, with a reason for every answer option.
Or take the full FAR mock examCommon questions
How much of the FAR section is accounting changes, contingencies, fair value and subsequent events?
It sits in Blueprint Area III (III.A, III.B, III.E, III.G). The AICPA weights whole areas, not single topics; see the area’s range on the FAR page. Our 50-question mock draws each area at the middle of its range.
Are these real FAR questions?
No. The AICPA does not release live exam questions. These are original practice questions written to the published 2027 CPA Exam Blueprints, with a reason for every answer option and the standard or code section behind the key.
More FAR topics
- Financial statements, disclosures and ratiosdrill
- Not-for-profit and government reportingdrill
- Cash, receivables, inventory, PP&E, intangibles and investmentsdrill
- Payables, debt and equitydrill
- Revenue recognition, lessee accounting and income taxesdrill
FAR full mock exam: 4 hours, 5 testletsFAR task-based simulations
Blueprint and exam facts checked November 2026: AICPA: Learn what is tested on the CPA Exam (Blueprints effective January 1, 2027) · AICPA: CPA Exam score release and testing windows · NASBA: CPA Exam FAQ · Virginia Board of Accountancy: CPA Exam fees.
Original independent practice questions written to the AICPA CPA Exam Blueprints. Not affiliated with or endorsed by the AICPA or NASBA.