ACCA AFM 2026: Why You're Typing Your Answer in the Wrong Box (SD25 Examiner Report)

In AFM, where you type your answer is worth marks. Put your discussion in the spreadsheet instead of the word processor and you're throwing away professional skills marks before the examiner has even read a word. The SD25 and MJ25 examiner reports keep flagging the same self-inflicted losses — and none of them are about difficult financial theory.

The two-box problem nobody practises

The AFM CBE gives you a spreadsheet and a word processor for a reason. The examiner is explicit: use the spreadsheet for detailed calculations and the word processor for text-heavy discussion — "just like you would in the workplace." A common weakness in MJ25 was candidates burying their discussion in amongst the numbers in the spreadsheet. It's harder to mark, it looks unprofessional, and it costs skills marks. Decide the split before you start typing.

The requirement said "recommend" — so recommend

In SD25, discussion was often very good and scored maximum marks. Yet "it was disappointing to note that quite a few candidates failed to provide a recommendation, even though the requirement specifically asked for one." A hedging or investment answer without a clear "we should therefore use X" is an unfinished answer. The recommendation is not a flourish — it is a marked requirement. End every discussion with a decision.

Hedging: name the trade

On foreign exchange hedging, candidates who picked the wrong instrument still earned follow-through marks — so a wrong choice is rarely fatal. What loses marks is vagueness. The examiner wants you to state whether you are buying or selling, which month, and how many contracts. "Use options" is not an answer. "Buy 40 September put options" is.

Assumptions and scepticism

When a requirement asks for assumptions, candidates "have a habit of suggesting sensitivity analysis should be used without any further explanation." That earns almost nothing. The strongest candidates said why a specific assumption might prove wrong and what it would do to the numbers — banking both the technical marks and the scepticism skills marks in one move.

Worked example: the FCFF interest trap

Requirement: Calculate the free cash flow to firm (FCFF) to value the target company.

Wrong: Operating profit, less interest paid, less tax, add back depreciation... A large number of candidates deducted interest here. But FCFF is the cash available to all investors — debt and equity. Financing costs are already captured in the WACC used to discount it.

Right: Operating profit, less tax on operating profit, add back depreciation, adjust for working capital and capex — no interest deduction. Deduct interest and you double-count the cost of debt, understate the firm value, and undermine every number built on top of it.

What to do

1. Split the screen on sight. Numbers in the spreadsheet, words in the word processor. Practise this on every past paper so it's automatic under time pressure.

2. Finish with a decision. Re-read the verb. If it says recommend, evaluate or advise, your last line must state a clear position — not just lay out both sides.

3. Make assumptions do double duty. Never just "use sensitivity analysis." Say which assumption is shaky, why, and the direction it would move the answer — that's where the scepticism marks hide.

The bottom line

AFM's global pass rate was 45% in December 2025 — and most of the gap to a pass is technique, not theory. The candidates who fail usually knew the models. They just typed in the wrong box, forgot to recommend, or double-counted interest. Fix the plumbing and the marks are already yours.