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ACCAACCA APM Cheat Sheet: EVA, Performance Frameworks and Reward Systems
ExpertMinds Editorial·3 June 2026·8 min read
Practice ACCA questions while you read →Key fact:APM exam: 3 hours 15 minutes · 100 marks · Section A (1 compulsory 50-mark question) · Section B (choose 2 of 3 × 25 marks). Pass rate March 2026: 40% — the hardest Strategic Professional option. Answers must link theory to the scenario.
Economic Value Added (EVA)
| Component | Formula / Adjustment |
|---|---|
| EVA | NOPAT − (WACC × Capital Employed) |
| NOPAT (Net Operating Profit After Tax) | Adjusted operating profit × (1 − tax rate) |
| Common NOPAT adjustments | Add back: goodwill amortisation, R&D expensed, operating lease interest (pre-IFRS 16 companies), increase in provisions |
| Capital Employed adjustments | Add back: cumulative goodwill amortised, capitalised R&D, operating lease assets, net increase in provisions |
| Interpretation | Positive EVA = value created above cost of capital; negative EVA = value destroyed |
Watch out:EVA adjustments trap: the examiner specifies which adjustments to make — do not invent adjustments beyond those given. Common mistake: applying all textbook adjustments when the question only provides data for some. Use only the information given.
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Performance Measurement Frameworks
| Framework | Structure | Key insight |
|---|---|---|
| Balanced Scorecard (Kaplan & Norton) | 4 perspectives: Financial, Customer, Internal processes, Learning & growth | Links strategy to operational measures; cause-and-effect relationships |
| Building Block model (Fitzgerald & Moon) | Dimensions (results + determinants) / Standards (ownership, achievability, equity) / Rewards (clarity, motivation, controllability) | Designed for service organisations; highlights non-financial dimensions |
| Performance Pyramid (Lynch & Cross) | Corporate vision → Market and financial objectives → Customer satisfaction, flexibility, productivity → Departments and work centres | Shows how operational measures link upward to strategic objectives |
| Triple Bottom Line | People / Planet / Profit | Sustainability performance; links to integrated reporting (IR) and IFRS S1/S2 |
Reward Systems — Examiner Criteria
| Criterion | Key question |
|---|---|
| Controllability | Is the manager being rewarded for outcomes they actually control? |
| Motivation | Does the reward system motivate goal-congruent behaviour? |
| Fairness | Are targets set equitably across divisions/managers? |
| Goal congruence | Do individual incentives align with overall organisational goals? |
Practise APM with Section A case questions
APM requires linking performance frameworks to strategic context — practise with complex multi-part questions.
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