ACCA AFM March 2026 Pass Rate 44%: 5 Mistakes Behind The Fail (June 2026)

AFM hit 44% in March 2026 — five points below TX, FR and SBR. The fail isn't usually about the model. It's about five errors the examiner has flagged in every report for the last three sittings.

1. Sunk costs in NPV

Candidates keep including R&D already spent. The classic example from the March/June 2025 examiner report: $200k of R&D had been incurred before the project started, and candidates loaded it into year 0. Sunk costs are out. The matching $50k annual amortisation deducted from profit also has to be added back when converting profit to cash flow. Profit is not cash.

2. Free cash flow valuation

When valuing a target using free cash flow to the firm, interest is not deducted — that's the lender's slice and is captured in WACC. Then once you have firm value, deduct debt to get equity value. Both errors hit hard in the March/June 2025 question and resurfaced in the December 2025 marking.

3. ESG bolted on, not integrated

The examiner does not reward textbook ESG frameworks. The question won't ask "what is ESG". It will ask whether the project is still worth doing once environmental costs rise, or whether the firm's ESG credentials change its cost of equity. Connect ESG to the calculation. If your ESG paragraph could be lifted into any AFM answer, it earns nothing.

4. Discussion in the spreadsheet

Section A is split: spreadsheet for the calculations, word processor for the analysis. Candidates type their evaluation alongside their numbers and the analysis marks slip past the marker. Numbers in the spreadsheet, prose in the word processor. Don't mix them.

5. Generic professional skills

There are 10 professional skills marks in Section A — communication, analysis and evaluation, scepticism, commercial acumen. They are not awarded for sounding professional. They are awarded when your technical point is tied back to the scenario. "A forward rate agreement limits downside" is a fact. "A forward rate agreement fits the board's stated requirement for predictable cash flow forecasting" earns commercial acumen.

Worked example: the sunk cost trap

Wrong: Year 0 outflow includes R&D ($200k) + machine ($1.2m) = ($1.4m).

Right: Year 0 outflow is the machine only — ($1.2m). The R&D is already spent and is irrelevant to the decision.

That one line can flip a borderline NPV from negative to positive — and it's a marker's gift mark.

What to do this week

Print one full past Question 1. Before you touch the spreadsheet, mark up every cash flow as relevant or irrelevant. If you can't justify a number, it doesn't go in.

After every calculation, type one sentence in the word processor on what the number means for the board's decision. That's where commercial acumen marks live.

For any ESG requirement, cap the framework explanation at three lines and spend the rest of the answer on the company-specific consequence. The ratio matters.

The bottom line

44% pass rate. Most candidates who fail AFM are technically capable of passing — marks are leaking from the same five places, sitting after sitting. Fix those before you do another mock.