ACCA Performance Management PM Complete Guide
ACCA Performance Management (PM): The Complete Guide
With a pass rate hovering around just 40–42%, ACCA Performance Management (PM) is consistently one of the most challenging Applied Skills papers. Yet thousands of students clear it every session — the difference lies in strategy, not just study hours.
ACCA Performance Management (PM), formerly known as Paper F5, is the Applied Skills level exam that tests your ability to apply management accounting techniques for planning, decision-making, performance evaluation, and control. It bridges the gap between foundational management accounting (Paper MA) and the strategic-level Advanced Performance Management (APM) paper.
This pillar guide is your single reference point for everything ACCA PM — from the complete syllabus breakdown and exam format to topic-specific deep dives, pass rate trends, and exam-day strategies. Every section links to detailed cluster articles so you can master each topic individually before bringing it all together.
Key fact: The ACCA PM exam is a 3-hour computer-based examination worth 100 marks, with a pass mark of 50%. It is divided into three sections: Section A (30 marks), Section B (30 marks), and Section C (40 marks).
Table of Contents
- What Is ACCA Performance Management (PM)?
- Why ACCA PM Matters for Your Career
- ACCA PM Syllabus Overview (2026–2027)
- Syllabus Area A: Information, Technology & Systems
- Syllabus Area B: Specialist Cost & Management Accounting Techniques
- Syllabus Area C: Decision-Making Techniques
- Syllabus Area D: Budgeting and Control
- Syllabus Area E: Performance Measurement and Control
- ACCA PM Exam Format & Structure
- ACCA PM Pass Rate Trends
- 8-Week ACCA PM Study Plan
- Exam-Day Strategy & Mark Maximisation
- Common Mistakes & How to Avoid Them
- Recommended Study Resources
- Frequently Asked Questions
What Is ACCA Performance Management (PM)?
ACCA Performance Management is the second management accounting paper in the ACCA qualification pathway. Positioned at the Applied Skills level, it builds on the foundations laid in Paper MA (Management Accounting) and prepares you for the Strategic Professional level paper APM (Advanced Performance Management).
The paper focuses on four interconnected pillars: costing techniques, decision-making, budgeting and control, and performance measurement. Unlike Paper MA which tests theoretical knowledge, PM demands that you apply techniques to realistic business scenarios — a critical distinction that catches many students off-guard.
Paper code: PM (formerly F5) | Level: Applied Skills | Exam type: Computer-Based Examination (CBE) | Duration: 3 hours | Pass mark: 50%
If you are new to the ACCA qualification and want to understand the full journey, see our guide on What is ACCA and ACCA Eligibility.
Why ACCA PM Matters for Your Career
Performance Management is not just an exam hurdle — the skills it develops are among the most sought-after in finance and business roles. Here is why PM is a career-shaping paper:
- Management accounting roles: Budgeting, variance analysis, and cost management are daily tasks for management accountants, financial controllers, and FP&A analysts.
- Decision support: The ability to conduct relevant cost analysis, CVP modelling, and pricing decisions makes you invaluable in strategic advisory roles.
- Performance evaluation: Frameworks like the Balanced Scorecard and Building Block Model are used globally by organisations to measure and improve performance.
- Gateway to APM: A strong PM foundation makes the Advanced Performance Management paper significantly more approachable at the Strategic Professional level.
For insights into ACCA career prospects and earning potential, explore our article on ACCA Careers & Salary.
ACCA PM Syllabus Overview (2026-2027)
The ACCA PM syllabus for the September 2026 to June 2027 examination cycle is divided into five core areas. Each area progresses logically — from understanding information systems, through costing and decision-making techniques, to budgetary control and performance measurement.
| Syllabus Area | Key Topics | Weighting |
|---|---|---|
| A: Information, Technology & Systems | Management information systems, data analytics, big data | 10% |
| B: Specialist Cost & Management Accounting | Activity-based costing, target costing, life-cycle costing, throughput accounting, environmental costing | 25% |
| C: Decision-Making Techniques | Relevant costing, CVP analysis, limiting factors, pricing, make-or-buy, risk & uncertainty | 25% |
| D: Budgeting and Control | Budgetary systems, forecasting, standard costing, variance analysis, planning & operational variances | 25% |
| E: Performance Measurement & Control | Balanced scorecard, building block model, divisional performance, transfer pricing, NFP performance | 15% |
The syllabus areas are interconnected. Areas B and C develop the technical toolkit, Area D applies it through budgeting and variance analysis, and Area E evaluates outcomes using performance measurement frameworks. Area A underpins everything with data and information systems context.
Syllabus Area A: Information, Technology & Systems for Organisational Performance
This area examines the role of information systems and data analytics in supporting management decisions. While it carries the lowest weighting (approximately 10%), it provides the conceptual foundation for the rest of the syllabus.
Core topics include:
- Management information systems and their uses in performance management
- Sources of management information and data security considerations
- Big data characteristics (volume, velocity, variety, veracity) and their impact on organisational decision-making
- The role of data analytics in identifying trends, forecasting, and improving operational efficiency
For a detailed exploration of how analytics intersects with PM, read our guide on Big Data Analytics in ACCA PM.
Exam tip: Area A is typically tested through Section A objective test questions. Focus on understanding how different types of information systems support specific management decisions rather than memorising definitions.
Syllabus Area B: Specialist Cost & Management Accounting Techniques
Area B carries a 25% weighting and is one of the most technically demanding sections. It moves beyond basic absorption and marginal costing into advanced techniques that organisations use for strategic cost management.
Key topics you must master:
| Topic | What It Covers | Exam Relevance |
|---|---|---|
| Activity-Based Costing (ABC) | Cost driver identification, cost pool allocation, comparison with traditional absorption costing | Frequently examined in Sections B and C |
| Target Costing | Market-driven pricing, target cost gap, value engineering | Often combined with life-cycle costing questions |
| Life-Cycle Costing | Tracking costs from development through decline, total cost visibility | Tested as narrative discussion or comparison |
| Throughput Accounting | Theory of constraints, throughput accounting ratio (TPAR), bottleneck management | High-frequency Section A and Section C topic |
| Environmental Costing | Environmental management accounting, sustainability considerations in costing decisions | Growing importance — tested narratively |
Throughput accounting is a particularly high-yield topic. For a complete walkthrough of the TPAR formula, interpretation guidelines, and worked examples, see our dedicated guide: Throughput Accounting Ratio ACCA PM .
Activity-based costing and budgeting are closely related. Understanding ABC principles will strengthen your grasp of activity-based budgeting — explore the connection in our guide on Activity Based Budgeting ACCA PM.
Syllabus Area C: Decision-Making Techniques
Area C accounts for 25% of the syllabus and is where many students find the exam most challenging. It requires you to apply quantitative techniques to business scenarios and make justified recommendations — not just calculate numbers.
The six sub-topics are:
- Relevant cost analysis: Identifying which costs and revenues change as a result of a decision. You must distinguish between relevant and irrelevant costs (sunk costs, committed costs, non-cash items).
- Cost-volume-profit (CVP) analysis: Break-even calculations, contribution analysis, margin of safety, target profit calculations, and multi-product break-even using weighted average contribution.
- Limiting factors: Single constraint decisions using contribution per limiting factor, and multi-constraint problems using linear programming (graphical method).
- Pricing decisions: Full cost-plus pricing, marginal cost-plus pricing, demand-based pricing using the price elasticity of demand formula, and optimal pricing using MR = MC.
- Make-or-buy and other short-term decisions: Outsourcing analysis, shut-down decisions, further processing decisions, and one-off contract pricing.
- Risk and uncertainty: Expected values, sensitivity analysis, simulation, decision trees, maximin, maximax, and minimax regret criteria.
CVP analysis is one of the most frequently examined topics in PM. For a complete breakdown with worked examples covering single-product and multi-product scenarios, read our dedicated article: CVP Analysis & Break Even ACCA PM.
Exam tip: Section C constructed response questions from Area C often require you to perform a calculation AND then discuss the limitations or assumptions underlying your analysis. Always budget time for the narrative component — it typically carries 8–10 of the 20 marks.
Syllabus Area D: Budgeting and Control
Area D carries a 25% weighting and represents the control mechanism of the syllabus. It tests your ability to prepare budgets, flex them for actual activity levels, and analyse variances to identify the causes of under- or over-performance.
Key sub-topics:
D1: Budgetary Systems and Types of Budget
- Top-down versus bottom-up budgeting approaches
- Fixed budgets versus flexed budgets
- Incremental, zero-based, activity-based, and rolling budgets
- Beyond budgeting philosophy and its criticisms of traditional budgeting
- Behavioural aspects of budgeting: participation, target difficulty, budget padding
Activity-based budgeting (ABB) applies the principles of ABC to the budgeting process and is a frequently examined comparison topic. Our detailed guide covers the full methodology: Activity Based Budgeting ACCA PM.
D2–D7: Standard Costing and Variance Analysis
This is the most calculation-intensive part of the entire PM syllabus. You must be able to calculate, interpret, and discuss the following variance categories:
| Variance Category | Individual Variances |
|---|---|
| Material variances | Price, usage, mix, yield |
| Labour variances | Rate, efficiency, idle time |
| Variable overhead variances | Expenditure, efficiency |
| Fixed overhead variances | Expenditure, volume (capacity, efficiency) |
| Sales variances | Price, volume, mix, quantity |
| Planning & operational variances | Separating uncontrollable (planning) from controllable (operational) variances |
Variance analysis is arguably the single highest-frequency topic across all three exam sections. Our complete guide covers the variance tree, worked examples, and examiner-style questions: Variance Analysis ACCA PM.
Exam tip: Planning and operational variances appear frequently in Section C. The examiner expects you to explain why separating the two types gives fairer performance evaluation — not just calculate them. Always link your analysis back to managerial decision-making.
Syllabus Area E: Performance Measurement and Control
Area E (approximately 15% weighting) is the capstone of the PM syllabus. It draws on everything covered in Areas A–D and applies it to evaluate organisational, divisional, and individual performance. This area is where narrative skills become critical.
The key sub-topics are:
E1: Performance Analysis in Private, Public, and Not-for-Profit Organisations
- Financial performance indicators (profitability, liquidity, efficiency ratios)
- Non-financial performance indicators and the balanced approach
- The Balanced Scorecard (four perspectives: financial, customer, internal process, learning & growth)
- The Building Block Model (Fitzgerald and Moon) — dimensions, standards, and rewards
- Performance measurement challenges in not-for-profit organisations and the public sector
- Value for Money (VFM) — economy, efficiency, and effectiveness (the 3Es)
The Balanced Scorecard is one of the most important frameworks in PM and has appeared in Section C repeatedly. For a detailed guide with examples across all four perspectives, see: Balanced Scorecard in ACCA PM.
The Building Block Model by Fitzgerald and Moon is equally critical for service-sector performance measurement. Our comprehensive article breaks down all three building blocks: Building Block Model for ACCA PM.
E2: Divisional Performance and Transfer Pricing
- Return on Investment (ROI) and Residual Income (RI) — calculation, interpretation, and limitations
- Transfer pricing methods: market-based, cost-based, cost-plus, negotiated, and dual pricing
- The impact of transfer pricing on divisional performance evaluation and goal congruence
- International transfer pricing considerations
Transfer pricing questions frequently trip up students because they require both calculation and discussion of behavioural implications. For a focused examination of common pitfalls and examiner expectations, read: Transfer Pricing ACCA PM.
ACCA PM Exam Format & Structure
Understanding the exam structure is essential for effective time management. The PM exam is a 3-hour computer-based examination (CBE) totalling 100 marks. All questions are compulsory.
| Section | Format | Marks | Time Allocation |
|---|---|---|---|
| Section A | 15 objective test questions (OTQs) — 2 marks each. Multiple choice, multiple response, fill-in-the-blank, drag-and-drop. | 30 | ~54 mins |
| Section B | 3 scenarios with 5 OTQs each — 2 marks per question. Each scenario presents a mini case study. | 30 | ~54 mins |
| Section C | 2 constructed response questions (CRQs) — 20 marks each. Typically drawn from Areas B, C, D, or E. Mix of calculations and narrative discussion. | 40 | ~72 mins |
Time rule: You have 1.8 minutes per mark. For a 20-mark Section C question, that means 36 minutes — plan your answer structure before writing.
Section C is where most students lose marks. The examiner consistently reports that students perform calculations but fail to provide adequate discussion, or they answer a different question from the one asked. Reading the requirement carefully before starting your answer is critical.
For a complete breakdown of exam technique pitfalls, see: 10 Fatal ACCA PM Mistakes That Destroy Student Dreams.
ACCA PM Pass Rate Trends
PM consistently records one of the lowest pass rates among Applied Skills papers. Understanding these trends helps you calibrate your preparation intensity.
| Exam Session | PM Pass Rate | Context |
|---|---|---|
| December 2024 | 41% | Below the Applied Skills average of ~48% |
| March 2025 | 42% | Marginally improved; consistent with trend |
| June 2025 | 41% | Stable; confirms PM as one of the toughest Applied Skills papers |
| September 2025 | 42% | Slight uptick; narrative weakness still cited by examiner |
| December 2025 | 40% | Dipped again; only AA had a lower pass rate among Applied Skills |
Key insight: The PM pass rate has remained in the 40–42% band across the last five sessions. Nearly 6 in 10 students fail each sitting. The examiner's reports consistently identify two root causes: poor time management in Section C, and an inability to apply knowledge to the specific scenario presented.
What does this mean for you? If you are relying on rote learning and formulae memorisation alone, the odds are stacked against you. Passing PM requires scenario-based practice under timed conditions — there is no shortcut.
For the full picture across every ACCA paper, see our detailed analysis: ACCA Pass Rates: Shocking Stats You Need to See.
8-Week ACCA PM Study Plan
A structured study plan is the single biggest predictor of PM success. The recommended commitment is 10–15 hours per week over 8 weeks, split across learning, practice, and revision phases.
| Week | Focus Area | Activities |
|---|---|---|
| Week 1 | Area A + Area B (ABC, target costing) | Study text chapters, make summary notes, attempt topic-specific OTQs |
| Week 2 | Area B (throughput accounting, life-cycle, environmental costing) | TPAR calculations, practice kit questions on costing techniques |
| Week 3 | Area C (relevant costing, CVP analysis, limiting factors) | Break-even calculations, multi-product CVP, linear programming graphs |
| Week 4 | Area C (pricing, make-or-buy, risk & uncertainty) | Decision trees, expected values, sensitivity analysis, pricing models |
| Week 5 | Area D (budgetary systems, standard costing, basic variances) | Budget types comparison, material and labour variance calculations |
| Week 6 | Area D (mix/yield, sales variances, planning & operational) + Area E | Advanced variance analysis, balanced scorecard, building block model, transfer pricing |
| Week 7 | Full revision + past paper practice | Attempt 2 full past papers under timed conditions. Review examiner reports for each. |
| Week 8 | Mock exams + weak area revision | Attempt 2 mock exams. Focus final 2 days on formula flashcards and Section C narrative practice. |
Study split recommendation: Allocate your weekly hours roughly as 40% learning new content, 40% practising questions, and 20% reviewing mistakes and revising notes. From Week 6 onwards, shift to 20% learning, 50% practice, and 30% revision.
For general strategies applicable to all ACCA Applied Skills papers, read: How to Pass ACCA F5 (PM).
Exam-Day Strategy & Mark Maximisation
Your exam-day approach can easily swing your result by 10–15 marks. Here is a structured strategy for each section:
Section A Strategy (30 marks — target 54 minutes)
- Attempt every question — there is no negative marking
- Flag difficult questions and return to them after completing Section B
- For calculation-based OTQs, work backwards from the answer options if you are stuck
- Read "which of the following is NOT correct" questions very carefully — students lose easy marks by misreading the requirement
Section B Strategy (30 marks — target 54 minutes)
- Read the scenario once fully before attempting any sub-question
- The 5 questions within each scenario are often linked — your answer to question 1 may inform question 3
- Allocate approximately 18 minutes per scenario (3.6 minutes per sub-question)
Section C Strategy (40 marks — target 72 minutes)
- Read the requirement FIRST before reading the scenario — this tells you what to focus on
- Spend 2–3 minutes planning your answer structure before writing
- Show all workings for calculations — partial marks are available even if the final answer is wrong
- For narrative requirements, use short paragraphs with clear headings — do not write in one continuous block
- Allocate time strictly: 36 minutes per 20-mark question. If you have not finished, move on and come back
- Always attempt both Section C questions — leaving one blank means forfeiting 20% of the exam
Critical reminder: The examiner's report for PM consistently states that the biggest cause of failure is students not answering the question set. Answering a question you have prepared for instead of the one actually asked will score very few marks, regardless of how well you write it.
Common Mistakes & How to Avoid Them
Based on examiner feedback across multiple sessions, these are the recurring errors that cost students the most marks:
| Mistake | Why It Happens | How to Fix It |
|---|---|---|
| Ignoring narrative requirements | Students assume PM is a pure numbers paper | Practice writing 2–3 paragraph discussions for every calculation question |
| Poor time management | Spending too long on one Section C question | Enforce the 1.8 min/mark rule strictly in practice sessions |
| Not reading the requirement | Rushing to start calculations | Highlight instructional verbs (evaluate, discuss, calculate, explain) before starting |
| Generic answers | Writing textbook definitions instead of applying to the scenario | Reference company names, figures, and specifics from the scenario in every answer |
| Not showing workings | Only typing the final answer | Label each step — markers award method marks even when the final figure is incorrect |
| Skipping a Section C question | Running out of time or perceived difficulty | Always attempt both — even 5 minutes of effort can secure 5–8 marks |
| Variance analysis sign errors | Confusing adverse and favourable labels | Use the standard approach: (Standard – Actual) × Quantity. Practice until automatic. |
We have compiled a full article on the most damaging PM exam mistakes with actionable solutions: 10 Fatal ACCA PM Mistakes That Destroy Student Dreams.
Recommended Study Resources
Choosing the right study materials can significantly impact your preparation efficiency. Here is what we recommend:
Study Texts and Practice Kits
- BPP Study Text and Practice & Revision Kit: The most widely used PM materials globally. Clear explanations with extensive worked examples and exam-standard practice questions.
- Kaplan Study Text and Exam Kit: An excellent alternative with a structured approach and comprehensive question bank.
For students who hold a CA Inter qualification and are looking at ACCA PM materials, our guide covers the best options: Best ACCA Books for CA Inter Students.
ACCA Official Resources
- ACCA Practice Platform: Free access to CBE-style practice questions that replicate the real exam environment. Essential for getting comfortable with the computer-based format.
- Examiner's Reports: Published after every exam session, these reports reveal exactly where students gained and lost marks. Reading the last 3–4 reports should be a non-negotiable part of your preparation.
- Technical Articles: ACCA publishes free technical articles covering high-frequency topics. These often signal what the examiner considers important.
Online Courses
- BPP ACCA Applied Skills ECR (Enhanced Classroom): Structured online coaching with mock exams, CBE practice, and tutor support. View BPP Applied Skills course details.
Formula Sheet Awareness
A formula sheet is provided in the exam, but it only covers selected formulae. You are expected to know many others from memory, including:
- Variance formulae (material price, usage, mix, yield, labour rate, efficiency)
- Break-even point, margin of safety, contribution-to-sales ratio
- Throughput accounting ratio (TPAR)
- ROI and Residual Income calculations
- Learning curve formula (if examinable in your session)
Create flashcards for these formulae and test yourself daily from Week 5 onwards.
ACCA PM Topic Deep Dives
This pillar page provides the complete overview. For detailed, exam-focused coverage of individual PM topics, use our cluster guides below:
Complete variance tree, worked examples, and examiner-style questions.
Single and multi-product break-even, margin of safety, target profit.
ABB methodology, advantages, limitations, and exam application.
TPAR formula, interpretation, and bottleneck management.
Four perspectives, KPI examples, and Section C practice.
Fitzgerald and Moon framework: dimensions, standards, rewards.
Pricing methods, goal congruence, and common exam pitfalls.
Data analytics role in performance management decisions.
Most common errors and how to avoid them.
Tips, resources, and strategies for passing PM.
Frequently Asked Questions
What is ACCA Performance Management (PM)?
ACCA Performance Management (PM), formerly Paper F5, is an Applied Skills level exam that tests your ability to apply management accounting techniques for planning, decision-making, performance evaluation, and control. It is a 3-hour computer-based examination worth 100 marks with a pass mark of 50%.
Is ACCA Performance Management hard?
PM is considered one of the most challenging Applied Skills papers. The pass rate has consistently hovered between 40–42% across recent exam sessions, meaning nearly 6 in 10 students fail each sitting. The difficulty comes from the need to apply techniques to scenarios rather than simply recall theory, and the significant narrative component in Section C that many students underestimate.
What is the ACCA PM pass rate?
The PM pass rate across recent sessions has been: December 2024 — 41%, March 2025 — 42%, June 2025 — 41%, September 2025 — 42%, December 2025 — 40%. This makes PM one of the lowest-performing Applied Skills papers alongside Audit and Assurance (AA).
How long does it take to study for ACCA PM?
The recommended preparation time is 10–15 hours per week over 8 weeks (approximately 80–120 total study hours). This should be split across learning new content (40%), practising exam-standard questions (40%), and revising weak areas (20%). Students with prior management accounting experience may need less time, while those new to the subject may need more.
What topics are covered in the ACCA PM syllabus?
The PM syllabus covers five areas: (A) Information, Technology & Systems — 10%, (B) Specialist Cost & Management Accounting Techniques — 25%, (C) Decision-Making Techniques — 25%, (D) Budgeting and Control — 25%, and (E) Performance Measurement and Control — 15%. Key topics include activity-based costing, CVP analysis, variance analysis, the balanced scorecard, transfer pricing, and throughput accounting.
What is the ACCA PM exam format?
The PM exam has three sections: Section A — 15 objective test questions worth 2 marks each (30 marks total), Section B — 3 case scenarios with 5 OTQs each worth 2 marks (30 marks total), and Section C — 2 constructed response questions worth 20 marks each (40 marks total). All questions are compulsory. The exam is computer-based and lasts 3 hours.
How to pass ACCA Performance Management?
To pass PM: (1) Follow a structured 8-week study plan covering all five syllabus areas. (2) Practice exam-standard questions under timed conditions — especially Section C constructed responses. (3) Read the last 3–4 examiner's reports to understand where students commonly lose marks. (4) Develop your narrative writing skills — PM is not a pure numbers paper. (5) Master variance analysis, CVP analysis, and the balanced scorecard as these are the highest-frequency topics. (6) Never skip a Section C question — always attempt both. For detailed strategies, read our guide on How to Pass ACCA F5.
Is 4 months enough for ACCA Performance Management?
Four months is more than sufficient for ACCA PM if you study consistently. The recommended preparation period is 8 weeks (2 months) at 10–15 hours per week. With 4 months, you have the luxury of a slower pace, which allows for deeper understanding and more practice question attempts. The key is consistency — studying 8–10 hours per week over 4 months is more effective than cramming 30 hours per week in the final 2 weeks.
What is the difference between ACCA PM and APM?
PM (Performance Management) is an Applied Skills paper focusing on management accounting techniques, costing, budgeting, and performance measurement at an operational level. APM (Advanced Performance Management) is a Strategic Professional optional paper that takes these concepts to a strategic level — covering strategic performance evaluation, management control systems, and decision-making for long-term organisational success. PM is a prerequisite foundation for APM.
When are the next ACCA PM exam dates?
ACCA PM is available as an on-demand computer-based exam at ACCA exam centres throughout the year. You can book your preferred date and time through the ACCA myACCA portal. For session-based exam dates and registration deadlines, see our regularly updated article: ACCA Exam Dates.
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