PocketCPA

Step 1-2: contract & performance obligations on the FAR CPA Exam

Step 1-2: contract & performance obligations is tested on the FAR section of the CPA Exam. It is a named topic of blueprint group FAR.III.C, Revenue recognition, which sits in FAR Area III, Select Transactions, at 25 to 35% of the section.

Section
FAR, Financial Accounting and Reporting
Area
FAR.III, Select Transactions, 25 to 35% of the section
Group
FAR.III.C, Revenue recognition
Authoritative literature
ASC 606
Skill levels tested
Remembering, Application, Analysis

Which standard covers Step 1-2: contract & performance obligations on the CPA Exam?

Step 1-2: contract & performance obligations is tested against ASC 606. The wider group FAR.III.C also reaches ASC 340, ASC 610.

At what skill level is Step 1-2: contract & performance obligations tested?

Step 1-2: contract & performance obligations is tested at 3 skill levels: Remembering (recall and understanding, which is multiple choice territory), Application (applying a rule to a fact pattern, which is where most simulations sit), Analysis (working across several concepts at once, which is simulation territory).

Is Step 1-2: contract & performance obligations tested outside FAR?

Yes. The same literature is tested outside FAR: ASC 606 in FAR.III.B (Contingencies & commitments); ASC 606 in BAR.II.C (Revenue recognition).

Area, group, topic, standard and skill levels are the AICPA published blueprint. Pass rates are the AICPA published candidate pass rates for 2026 through Q2, read from AICPA & CIMA on 2026-08-17. The AICPA publishes them quarterly. Where the same standard is tested outside FAR is PocketCPA's own mapping.

Every FAR blueprint area, group and topic · Which standards the CPA Exam tests · FAR pass rate and format

Common questions

Is Step 1-2: contract & performance obligations tested on the CPA Exam?

Step 1-2: contract & performance obligations is tested on the FAR section of the CPA Exam. It is a named topic of blueprint group FAR.III.C, Revenue recognition, which sits in FAR Area III, Select Transactions, at 25 to 35% of the section.