ACCA Pass Rates December 2019 Exam: Part 2 Tips (Focus on SBL, SBR, AFM, APM & AAA)

Updated: Apr 21, 2020

ACCA December 2019 results and pass rates for all papers are published!

The focus in this attempt is on computer based exam and strategic CBE. Strong word processing and spreadsheet skills are proved critical in passing the exams.

ACCA executive director strategy and development said: ‘Examiners note that pass rates are very strong where students have developed the word processing and spreadsheet skills they already or will use in the workplace and apply these to their exams, thus integrating the world of work and exams.’

Starting from March 2020, ACCA will be offering its Strategic Professional as CBEs at specific centres in the UK, Ireland and Czech Republic and then wholly in those countries from June 2020.

Link to announcement:

In addition, ACCA will launch Strategic Professional CBE in 2020. Just check our analysis of the new Strategic Professional CBE for your benefits.

It is always important to review examiner comments as they are highly regarded as the exam tips directly from the authority. No matter you will attempt March 2020 or any future exam, they are the ‘tips’ to you.

Let’s start the sharing of what examiners tell you need to pay attention in next exam!

Strategic Professional Module Pass Rates

Two essential papers in this module performance is stable while SBR pass rate is 48% and SBL pass rate is 46% in December 2019.

The focus in this attempt is on computer based exam and strategic CBE. Strong word processing and spreadsheet skills are proved critical in passing the exams.

ACCA executive director strategy and development said: ‘Examiners note that pass rates are very strong where students have developed the word processing and spreadsheet skills they already or will use in the workplace and apply these to their exams, thus integrating the world of work and exams.’

ACCA SBL – Reading and Planning is the key to pass

It is a 4-hour exam with a single compulsory section.

The marking scheme included 80 technical marks for the correct use and application of technical knowledge.

In addition, 20 marks are for professional skills and competencies.

Generally, you need to take note of the following in order to do well in SBL:

· Spend sufficient time reading and assimilating the case study material before even contemplating answering the questions;

· Spend sufficient time planning their answers to ensure they are structured logically, covering most important points, balanced in terms of depth and breadth of discussions, not padded out with superfluous waffle and avoiding unnecessary overlap and duplication;

· It is recommended to answer the requirements in order especially examiner considers future exams may follow a timeline or have question requirements that progress in other ways.

Professional skills tested in this attempt include analysis, commercial acumen, scepticism, evaluation and communication.

General comments on this session SBL exam are –

· Generally, all four tasks are answered but the rushed appearance of some answers to the final task suggested shortage of time;

· Mostly answered the questions in order and in this exam task 4 brought together a number of themes that underpinned the case study and which candidates should have been considering when answering earlier tasks. It is recommended that candidates answer the requirements in order.

There are two parts in task 1.

Part a asks to prepare a briefing paper which analyses the portfolio of company’s business and recommend future investment. It required the demonstration of analysis skills.

Part b requires a preparation of report to discuss and question whether there is a need to restructure current value chain activities to create value. It required the demonstration of skepticism skills.

Generally well done in Part a such as correctly applying BCG Matrix as a portfolio analysis model and their recommendations considered the choices within the portfolio and the need of the company.

The overall standard of Part b answer was variable. Significant weakness includes criticizing activities, not questioning; explain value chain components from theoretical perspective; and making suggestions for changes with no evidence to support.

Task 2 is divided into two parts. Part a asks for a briefing notes which assess two external drivers of change and recommend an appropriate action to take.

Part b requires one presentation slide explaining the benefits of exploiting the company’s technology in products to motivate design team.

Part a was well answered with many answers identifying the impact of government and customer attitudes.

Part b was answered poorly. Many students looked at other points instead the required issues, some answers are too brief and not details provided and some produced more than one presentation slides. Last but not the least, many answers failed to use a convincing and motivating tone.

Task 3 asked for assessment of two countries attractiveness for production and professional marks were to be given for evaluation skills.

This task was answered well. Many students presented their answers with good structure by using the Porter’s Diamond or by using the PESTEL framework given.

Task 4 requires an email to advise leadership style, culture and organizational success to date and how these could be exploited. Professional skills were to be awarded for commercial acumen.

This task performance was mixed. Some candidates failed to answer all three requirements. In addition, some students didn’t understand their role is project manager and making no connection with the organizational factor and project outcomes.

Detailed examiner’s report can be found:

ACCA SBR – Stable performance

The purpose of SBR is to assess your professional competences within the corporate reporting environment.

Its syllabus is not significantly different to the P2 syllabus but it requires more written answers rather than numerical ones.

The exam contains two sections, A and B. Section A includes 2 questions which totaled 50 marks while Section B has 2 questions and 25 marks each.

General approaches to SBR examination are –

· Students are examined on how they apply concepts and principles to life-like scenarios that reliance on a single textbook or revision course will not be sufficient to pass. Their readings are expected to expand beyond textbook including articles from IASB, the profession and ACCA.

· Students are expected to synthesise and evaluate material, the key focus is on the application of knowledge.

· The SBR exam also includes ethical aspects requiring students to show their understanding of the professional and moral judgments.

SBR December 2019 pass rate is 48%, it’s in the average since SBR launched in 2018.

Question 1 is divided into two parts. First part asks i) draft an explanatory note regarding to classification of an investment in an associate; ii) how the associate should be equity accounted for; iii) the classification of the associate should change in the event of a fresh purchase of shares by the holding company; and iv) discuss the implications of the acquisition of an additional holding of shares and share options.

Generally, first part was well answered in particular on discussing the nature of significant influence.

Final part is divided into i) discuss how the fair value of the non-current and current assets at acquisition should be calculated together with a calculation of goodwill/gain on bargain purchase; ii) Calculation of goodwill, whilst considering a piecemeal/step acquisition.

In general, the question was quite well answered but seemed many students spend a disproportionate amount of time on this question.

2 parts in Question 2 while all parts were very well answered. The first part requires a discussion of ethical implications of the events and circumstances. Part b requires a discussion of the principles that under support IAS 16. Regarding to the ethical part, insider trading issue is seldom discussed; for part b, very few answered mentioned the implications of IAS 1 which states that an entity should not aggregate or disaggregate information in a manner which obscures useful information.

Question 3 was divided into four parts. Part a asks a discussion of the criteria used by the Conceptual Framework for Financial Reporting (2018) and IFRS standards which could be used to recognize diverse production costs as assets. The part of question was not well answered as many students could not draw upon their knowledge from a range of different accounting standards.

Part b requires an understanding of the principles which should be used to conduct the impairment testing of two non-current assets. However, many candidates did not set out the principles correctly.

Part c is about an entity controls another entity and whether it should consolidate it in its financial statements. Final part requires a discussion why an investment in a company should be classified as debt, and not NCI in group financial statements.

It’s noted that some candidates find it is difficult to apply accounting principles to a scenario. Future students are suggested to familiar on how to apply those principles through practicing past exam paper questions.

Question 4 is divided into three parts and many students omitted part b and c as it seemed they had run out of time because spending too much time on question 1 and 2.

Part a asks whether the entity was acting as principal or agent in a relationship with a third party. In addition, it’s required to show how to account for the non-refundable upfront fee. It is a question about IFRS 15 that many answers were well performed.

Part b asks a discussion and comparison of accounting treatment of an asset acquisition and a business combination. Part c requires a discussion of the impact for investors of treating the purchase as an asset acquisition or a business combination.

As said, part b and c were poorly performed while only brief answers noted.

Detailed examiner’s report can be found:

ACCA AFM (was P4) – Stable performance

Advanced Financial Management (AFM) pass rate is generally ranged between 33% and 38%. In December 2019, it’s at the lower end of the range which is 33%.

This exam is in two sections. Section A consisted of a 50-mark compulsory question. Section B consisted of two compulsory questions of 25 marks each. All three questions in this examination contained a mixture of computational and discursive elements.

The main reasons for less well performance are –

· Lack of detailed knowledge

· Poor time management

· Restating the materials in question

· Failing to respond fully to the requirements

· Poorly structured computational answers

· Not adopting balanced approach in answering questions

Question 1 is a 50-mark compulsory question in which the case study scenario focused on a number of risk management areas. In addition, technical calculations are tested the ability to advise and explain with regard to risk management issues. Three parts are required as follows:

a) Discuss key changes that would be required if a treasury department was to be run as a profit centre instead of cost centre;

b) Calculating i) impact of undertaking multilateral settlement; ii) an amount payable in using both money market hedge and exchange-traded futures hedge; iii) the hedge of some future expected borrowings using both an FRA and exchange-traded options; For iv) and v), students were asked to give advice based on their previous calculations and explain delta and gamma risk, with further elements of the requirement relating OTC options;

c) Discuss the validity of a statement regarding whether or not it is worth a company actively managing its risks.

Part a was not answered well and many scripts was often left blank or largely blank. It was the same for part c. It shows that many students can only perform calculations but lack of in depth understanding of risk management and cannot apply their knowledge to give advice.

Question 2 is divided into three parts which are about investment appraisal, both technical calculations an explanations of a number of issues required.

Part a asked an investment appraisal calculation as well as the calculation of sensitivities and value at risk.

Part b required to explain weaknesses in the investment policy’s assessment of the risks associated with the project’s NPV and identify how those risks could be mitigated.

Part c asked to explain why the presence of real options may mean that the NPV calculated may be underestimated.

Three areas are found difficult to students: 1) The calculation of sensitivities was unsatisfactory; 2) Very few answered the weaknesses in investment policy but discussed limitations of NPV; 3) Few to explain why real options add value.

Question 3 is divided into two parts which is relevant to restructuring.

Requirements for each part are –

a) It contains three sub-parts which are i) Calculate the net cash flow that would be generated on the date that the restructuring was forecast to take place; ii) Prepare a revised statement of financial position as at the date the restructuring was to take place; iii) Advise whether or not covenants that were to be imposed were likely to be breached in future;

b) Discuss whether the proposed restructuring scheme was likely to be accepted by the capital providers.

The answers to Part a (iii) and Part b were generally poor. Regarding to the covenants were likely to be breached or not, many answers had no supporting calculations. For Part b, many scripts was often left blank or largely blank which may been due to running out of time.

Detailed examiner’s report can be found:

ACCA APM (was P5) – Improvement needed

In December 2019 attempt, Advanced Performance Management (APM) pass rate was slightly up to 33% from 31% in September 2019 session.

Since September 2018 attempt, there have been no choice of questions in APM and the examiner found a number of students may have been caught out by this, having not prepared to answer questions across the whole syllabus.

In addition, some students showed MA or PM approach in attempting APM while they can only get very limited scores that cannot pass it.

There are three APM exam tips suggested by examiner, which are –

1. Grasp all basic knowledge. At this diet, a lack of knowledge on value chain analysis and on risk and uncertainty;

2. Professional-level answer will go beyond the mere repetition of how a technique works and focus on specific environment;

3. Capable of analyzing and evaluating the whole situation in the scenario using their technical knowledge.

Question 1 was based around a manufacturing company with a divisionalised structure. The overall performance of question 1 was good.

There were three parts in question 1 –

i. Evaluate the overall performance of the divisions using some financial performance measures and then evaluate the usefulness of the measures themselves;

ii. Use of a strategic performance model to analyze the divisions and how this analysis could be applied to performance measurement within the divisions;

iii. Focus on management accounting information and the criteria for it to be useful.

There were two weaker performed areas in Question 1. First, many candidates failed to use the correct figures in the calculation of the measures and in some instances did not perform any calculations at all. Next, majority of candidates were unable to recommend financial KPIs.

Question 2 was based around a retailer. It relates to a benchmarking exercise that was to be undertaken and business process reengineering.

Part (a) focused on calculation and evaluation of performance measures;

Part (b) required an evaluation of the method of benchmarking being used;

Part (c) asked candidates to suggest improvements to the current processes in place using business process reengineering (BPR).

Many parts in question 2 were answered well except 1) Evaluation of performance was poorly attempted and remember that when evaluating a measure, you need to consider its alignment with the relevant objectives; 2) Putting answers but not required led to wasting time.

Question 3 was based on a company facing potential corporate failure.

It is divided into two parts while both part was done well.

Part a asked for advice, using corporate failure model, on why the company was at risk of corporate failure. It was well attempted and some students scoring full or nearly full.

Part b required an explanation of the problems of using the corporate failure model. Though many good answers were found, it is worth noting that some weaker answers gave explanations simply description but not explain how they apply to the scenario.

Detailed examiner’s report can be found:

ACCA AAA (was P7) – Disappointed!

ACCA AAA December 2019 pass rate is 30%, down from 36% in September 2019.

The exam is in two sections; Section A consisted of a 50-mark question, and Section B which consisted of two questions of 25-marks each. All questions are compulsory.

In general, Question 1 is about evaluating risk at the planning stage of the audit alongside audit procedures. Question 2 focuses on completion, review and reporting. Question 3 covers acceptance of other assignments, ethics and procedures to be performed.

I always consider AAA is the most challenging paper in ACCA professional exam. The knowledge demanded is from Audit & Assurance (AA) to Strategic Business Reporting (SBR).

The majority of marks derive from the application and understanding of that knowledge rather than the knowledge itself.

In other words, you are required to answer the questions by addressing the scenario presented to pass.

To better prepare for the exam, you are not only studying text books and past exams but also need to read through a series of technical and exam articles on ACCA website.

Examiner highlights the most common weaknesses in AAA which should be studied well by future candidates taking this exam –

· Lack of basic double entry skills, such as confusing assets and liabilities or assuming that if assets are overstated profit must be understated;

· Lack of underlying knowledge of financial reporting;

· Unable to make an appropriate materially judgement;

· Failure to understand the impact of issues on the auditor’s report.

Question 1 is a 50-mark question on the planning for a listed manufacturing company trading as a single entity. Overall format was similar to that in December 2018 examination. This question consists 4 parts as follows:

a) Evaluate the specific business risks;

b) Evaluate audit risks;

c) Devise audit procedures in relation to two areas of financial statements;

d) Cover the interaction of internal and external auditors by applying the rules of ISA 610 Using the Work of Internal Auditors.

Generally, Part a, c and d were well answered. Part b showed two weaknesses by students, 1) Many students were willing to do further calculations of the ratios provided instead of interpret the ratios in their answers which was a waste of time; 2) The requirement was to evaluate the risks but many answers addressed or mitigated the risks.

Question 2 is a 25-mark question set at the completion stage of an audit and the performance was disappointing. It’s format was similar to September 2018 reporting question. It consists 3 parts which are –

a) Address proposed adjustments in a given summary of uncorrected misstatements with the client management;

b) Describe actions to be taken if the adjustments were not made and to justify an appropriate audit opinion;

c) Tested on ethics and professional issues.

Common problems are:

· Ignored the correct accounting treatment provided and criticised the adjustment the audit firm were proposing;

· Described inappropriate accounting treatments;

· For Part b, many students ignored to describe the actions to be taken;

· Unable to distinguish between the annual report and the financial statements.

Question 3 is a 25-mark question on other engagements and client acceptance procedures which was generally answered well, especially for those demonstrated commercial awareness and addressed full requirements. It is divided into three parts which are –

a) Explain specific enquiries to be made during a due diligence assignment to understand valuation and operational significance of intangible assets (Reference: Q3ai from September/December 2017);

b) Recommend additional information which would help assess other areas of the target company;

c) Practice management area of engagement acceptance.

The first part is not very strong and weaker students produced lists of procedures describing how they would audit intangible assets under IAS 38, however, it is not relevant to the valuation of assets at acquisition here.

Detailed examiner’s report can be found:


Generally, December 2019 session pass rates in many papers are more or less the same as prior attempts.

If you check ACCA published articles on those papers in Strategic Professional level, you would find the association now organized the articles and materials better in order to help you to pass the exam.

We do hope that the pass rates for those subjects can be improved gradually.

Given the focus in Strategic Professional Module is to apply your knowledge (both in this module or the basic knowledge from Applied Skills Module), you are suggested to better plan your schedule to take exam right after what you did in prior module.

It helps to improve your chance to pass.

If you have any questions or comments, just send me email at and I will answer you shortly.