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F5 is at the skills level and tests the candidate's ability in the application and analysis of core management accounting techniques. P5 develops key aspects introduced at the F5 level, with more of a focus on the synthesis and evaluation of the key topics and techniques. P5 also introduces more specialised techniques and current issues in performance management.
The whole of the F5 syllabus is assumed knowledge for a P5 candidate. It is unlikely that F5 topics will be retested in P5. However, a candidate that does not know the methods and techniques taught for F5 will struggle to complete the tasks in P5, which are to synthesise and evaluate those methods in business scenarios.
The boundaries between P3 and P5 can be thought of in terms of scope or breadth.
P3 takes a much wider view of a business and involves various ways of analysing it such as looking at its environment, resources, capability, structure, culture and performance in a number of different ways.
P5 has more of an accounting focus and is more specifically concerned with the measurement, control and improvement of performance in the financial and quantitative sense. Any similarities in subject coverage should be seen in these different contexts.
Although some topics will continue to feature in both papers, the focus and contexts will usually be very different. For example, while in P3 candidates may be required to formulate a SWOT analysis in general business terms, in P5 they will only consider how SWOT analysis may help in the performance management process.
Technical articles will be used to bring candidates' attention to current topics covered by the syllabus but not mentioned specifically.
Therefore candidates are advised to read our technical articles on performance management in preparing for the paper. Please note that candidates should read technical articles from more than the last couple of years.
This is because performance management moves slowly than say, tax or financial accounting, with trends taking years to build.
EIS refers to the system that is used by the senior executive to plan and control the business. ERPS contains sub-systems with these functions but can also be used to cover the lower-level systems of an organisation.
ERPS is often associated with the move to a single database or data store for the organisation's needs. So, these topics are broadly similar but not exactly the same.
If the question is addressing strategic information needs, then preference would be to use EIS as it is more precise.
In so far as stakeholder analysis may prove useful then yes, it is examinable.
Mathematical tables will be provided in the exams (and Annuity tables). Formulae sheet will not be provided with each exam paper but specific formula will be given where a question requires one.
Yes, provided these are explained sufficiently in order to allow a marker to see their relevance to the question asked.
Yes, as they are assumed knowledge from the F5 syllabus.
This is a core area and we plan to focus on it more in the future. The exam may have a 20-mark question on IT (Section B) or it could be covered as part of a question in Section A, as in Question 1 from the December 2010 paper.
Yes, but it's the application of both F5 and P5 models that is most important.
The topic of strategic pricing is not examined in P5 as it is in P3. However, there are obvious price implications related to many questions on performance management and candidates would be expected to comment on these.
Lengthy discussion of, for example, market skimming and market penetration would not be required.
The solution to Question 2 part a) of the December 2010 Paper is a good example of what is expected of candidates.
Yes, it is a core area.
There are two articles written by Nick Ryan on this subject in Student Accountant. The articles address changes in financial reporting that have affected EVA calculations and will explain in detail what is expected of candidates as a result.
Both models are applicable and questions on this area may allow the use of either or may ask for the use of a particular model.
The implications of a proposed strategy are relevant for Paper P5 because of their impact on the management of performance of the organisation in question.
So a question may ask about how the proposed mission, values or strategies feed into success factors and the drivers of performance, and then how these are reflected in the KPIs that are used.
The key questions are about the coherence of these choices, their consistency and the subsequent impact on management activity in monitoring and controlling the organisation.
Formula will only be given if the questions requires the use of one. Formulae will be given for learning curves and Z scores (or any other credit-scoring formulae). WACC (Weighted Average Cost of Capital) formula will not be given as this is basic knowledge. For EVA only the exam formula will be given.
Last updated: 21 Mar 2013