Why Did So Many Candidates Fail FAR226?

The official FAR226 pass rate was below 65%, making it one of the lowest pass rates in recent years.

After reviewing the exam paper and examiner feedback, I believe there were several key reasons behind the result.

1. Fewer Questions Closely Resembling Past Exams

Many candidates rely heavily on practising past exam questions. While there is nothing inherently wrong with this approach, FAR226 demonstrated the limitations of relying on past papers alone.

For example, Question 1 tested the Revenue Input Method. Although this topic had not appeared directly in previous final exams, it was covered in textbook examples.

Candidates were also asked to discuss the impact of a research centre on an impairment test. Previous exams had included impairment calculations, but not this particular discussion-based scenario.

Similarly, Question 3 required candidates to discuss vesting conditions and their impact on grant date fair value. While this is an important examinable concept, it had not previously appeared in the same form in the final exam.

The lesson is simple: practising past papers is useful, but candidates must learn to identify the underlying concepts and apply them in unfamiliar situations.

At AlexCA, we consistently emphasise that examinable content originates from the study guide, textbook examples, and end-of-chapter questions—not from past exams.

A safer study approach is:

1. Learn the underlying concepts.

2. Practise textbook examples and review questions.

3. Then use past exams to consolidate your knowledge.

   
   

2. Many Candidates Did Not Fully Read the Requirements

Examiners continue to evolve their assessment style. The days of applying a memorised template from start to finish without carefully reading the question are gradually disappearing.

For example, Question 2 clearly stated that the FVTOCI debenture investment had been acquired in the 2024 financial year and required journal entries relating to the 2026 financial year.

The examiner was therefore looking for:

• Interest receipt entries for 2026

• Fair value movement entries for 2026

• 
  

However, many candidates spent significant time preparing journal entries for 2024 and 2025, earning no marks for that work.

Similarly, the final part of Question 3 required candidates to calculate revenue for 2026 and explicitly stated that journal entries were not required.

Despite this instruction, many candidates still prepared journal entries, wasting valuable exam time on work that could not earn marks.

Examiners generally reward candidates for answering the question that was asked—not the question they hoped would be asked.

Advice for Future FAR Candidates

A. Read the Requirement Three Times

Before attempting any calculation or journal entry, make sure you fully understand what the examiner is asking.

This principle applies not only to FAR but to all CA assessments.

If the examiner asks for calculations, provide calculations.

If the examiner asks for discussion, provide discussion.

If the examiner specifically states that journal entries are not required, do not prepare journal entries.

Marks are awarded for answering the requirement, not for demonstrating everything you know about the topic.

B. Focus on Core Concepts and Learn to Apply Them

Even when questions appear difficult, they are usually built around fundamental concepts.

For example, Question 1 ultimately tested:

• When impairment testing is required

• How impairment losses are allocated

• 
  

The scenario may have been different, but the underlying concepts remained unchanged.

Candidates should focus on understanding the principles rather than memorising specific question formats.

Consider leases as another example.

The initial recognition of lease liabilities and right-of-use assets is consistently important. FAR226 examined cash lease incentives, but future exams could just as easily test:

• Rent-free periods

• Prepaid lease payments

• Lease termination payments

  
  

When studying a topic, avoid focusing solely on the exact variation tested previously. Other variations within the same topic are equally likely to appear.

C. Allocate Study Time Based on Exam Weightings

Not all chapters carry the same importance.

Chapters 2.6 and Chapter 3 are typically the most heavily examined areas, often accounting for approximately 40–50% of the final exam. In FAR226, they represented nearly half of the available marks.

These topics are effectively "guaranteed" to appear, so they should receive significant attention during revision.

In particular, Consolidated Financial Statements are often considered the most difficult area in the entire FAR subject. However, candidates who prepare properly and develop structured approaches can turn this into one of the most reliable sources of marks.

Chapters 2.1–2.5 are also highly important and typically represent around 40% of the exam. These include major topics such as:

• Impairment

• Income Tax

• Leases (arrears and advance payments)

• Revenue from Contracts with Customers

• 
  

Within revenue, several of the five-step model components appear regularly and should be thoroughly understood.

Chapter 1 is still examinable, but its weighting is generally lower and is unlikely to contribute more than a few marks.

As a result, candidates should prioritise their revision effort accordingly.

Final Thoughts

Success in FAR is not about memorising past exam answers.

It comes from:

• Understanding the core concepts

• Practising textbook examples and end-of-chapter questions

• Learning how to apply principles in unfamiliar scenarios

• Carefully reading and answering the actual requirement

• Allocating study time according to exam weightings

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Build your preparation on these foundations, and you will place yourself in a much stronger position for future FAR exams.

Good luck to all future FAR candidates.