ACCA Financial Management (FM, AFM) - 2027

I. Financial Management (FM)

The aim of FM is to develop the knowledge and skills expected of a finance manager, in relation to investment, financing, and dividend policy decisions.

The syllabus for Financial Management (FM) is designed to equip candidates with the skills that would be expected from a finance manager responsible for the finance function of a business. It prepares candidates for more advanced and specialist study in Advanced Financial Management (AFM).

A Financial management function

1. The nature and purpose of financial management

2. Financial objectives and relationship with corporate strategy

3. Stakeholders and impact on corporate objectives

4. Financial and other objectives in not-for-profit organisations

B Financial management environment

1. The economic environment for business

2. The nature and role of financial markets and institutions

3. The nature and role of money markets

C Working capital management

1. The nature, elements and importance of working capital

2. Management of inventories, accounts receivable, accounts payable and cash

3. Determining working capital needs and funding strategies

D Investment appraisal

1. Investment appraisal techniques

2. Allowing for inflation and taxation in DCF

3. Adjusting for risk and uncertainty in investment appraisal

4. Specific investment decisions (lease or buy, asset replacement, capital rationing)

E Business finance

1. Sources of, and raising, business finance

2. Estimating the cost of capital

3. Sources of finance and their relative costs

4. Capital structure theories and practical considerations

5. Finance for small- and medium-sized entities (SMEs)

F Business valuations

1. Nature and purpose of the valuation of business and financial assets

2. Models for the valuation of shares

3. The valuation of debt and other financial assets

4. Efficient market hypothesis (EMH) and practical considerations in the valuation of shares

G Risk management

1. The nature and types of risk and approaches to risk management

2. Causes of exchange rate differences and interest rate fluctuations

3. Hedging techniques for foreign currency risk

4. Hedging techniques for interest rate risk

H Employability and technology skills

II. Advanced Financial Management (AFM)

AFM develops upon the core financial management knowledge and skills covered in the Financial Management (FM) syllabus and prepares candidates to advise management and/or clients on complex strategic financial management issues facing an organisation.

A Role of senior financial adviser in the multinational organisation

1. The role and responsibility of senior financial executive/advisor

2. Financial strategy formulation

3. Corporate environmental, social, governance (ESG) and ethical issues

4. Management of international trade and finance

5. Strategic business and financial planning for multinational organisations

6. Dividend policy in multinationals and transfer pricing

B Advanced investment appraisal

1. Discounted cash flow techniques

2. Application of option pricing theory in investment decisions

3. Impact of financing on investment decisions and adjusted present values

4. Valuation and the use of free cash flows

5. International investment and financing decisions

C Acquisitions and mergers

1. Acquisitions and mergers versus other growth strategies

2. Valuation for acquisitions and mergers

3. Regulatory framework and processes

4. Financing acquisitions and mergers

D Corporate reconstruction and re-organisation

1. Financial reconstruction

2. Business re-organisation

E Treasury and advanced risk management techniques

1. The role of the treasury function in multinationals

2. The use of financial derivatives to hedge against forex risk

3. The use of financial derivatives to hedge against interest rate risk

F Professional skills

1. Communication

2. Analysis and evaluation

3. Scepticism

4. Commercial acumen

G Employability and technology skills