ACCA P5 - Advanced Performance Management Study Text 2015

Paper P5Advanced Performance ManagementThis ACCA Study Text for Paper P5 AdvancedPerformance Management has beencomprehensively reviewed by the ACCA examiningteam. This review guarantees appropriate depthand breadth of content and comprehensive syllabuscoverage.April 2015 32.00ACP5ST15 (RICOH).indd 1-3For exams from 1 September 2015 to 31 August 2016BPP House142-144 Uxbridge RoadLondon W12 8AAUnited KingdomT 0845 075 1100 (UK)T 44 (0)20 8740 2211 (Overseas)E Learningmedia@bpp.combpp.com/learningmedia A user-friendly format for easy navigation Exam focus points describing what the examiningteam will want you to do Regular Fast Forward summaries emphasising thekey points in each chapter Questions and quick quizzes to test yourunderstanding A practice question bank containing examstandard questions with answers A full index All you need in one bookStudy TextContact usIn addition to ACCA examining team reviewedmaterial you get:Advanced Performance ManagementBPP Learning Media is dedicated to supporting aspiring business professionalswith top-quality learning material as they study for demanding professionalexams, often whilst working full time. BPP Learning Media’s commitmentto student success is shown by our record of quality, innovation and marketleadership in paper-based and e-learning materials. BPP Learning Media’s studymaterials are written by professionally qualified specialists who know frompersonal experience the importance of top-quality materials for exam success.ACCA P5ACCA approved content providerACCA APPROVEDCONTENT PROVIDERACCA ApprovedStudy TextPaper P5Advanced PerformanceManagementStudy Text for exams from1 September 2015 to 31 August 2016Free accessto our ExamSuccess siteLook inside27/04/2015 15:09

ACCA APPROVED CONTENT PROVIDERAs the first accredited publisher of ACCA materials, BPP Learning Media has set the benchmark forproducing exceptional study materials for students and tutors alike.Our Study Texts, Practice & Revision Kits and i-Passes (for ACCA F1/FIA FAB, ACCA F2/FIA FMA, ACCA F3/FIA FFA and ACCA F4) are reviewed by the ACCA examining team and are written by our in-house authorswith industry and teaching experience who understand what is required for exam success.EXAM SUCCESS SITETo help maximise your chances of succeeding in your exams, we’ve put together a suite of exclusive ACCAresources. Our Exam Success site provides you with access to a free digital version of this publication, aswell as extra resources designed to focus your efforts on exams and study methods.To access the Exam Success site, please email learningmedia@bpp.com with the subject line “Access to ExamSuccess site - eBook”, including your order reference number and the name of the book you’ve bought (ieACCA F7 Study Text) for your access code. Once you have received your code, please follow the instructionsbelow:To access the BPP ACCA Exam Success site for this materialplease go to:www.bpp.com/ExamSuccessSiten Create a user account if you don’t already have one.Make sure you reply to the confirmation email.n Log in using your registered username and password.Select the paper you wish to access.n Enter the code you received when prompted. You will onlyhave to do this once for each paper you are studying.

STUDYPAPER P5ADVANCED PERFORMANCEMANAGEMENTBPP Learning Media is an ACCA Approved Content Provider. This means we workclosely with ACCA to ensure this Study Text contains the information you need to passyour exam.In this ACCA examination-team reviewed Study Text we: Highlight the most important elements in the syllabus and the key skills you need Signpost how each chapter links to the syllabus and the study guide Provide lots of exam focus points demonstrating what is expected of you in the exam Emphasise key points in regular fast forward summaries Test your knowledge in quick quizzes Examine your understanding in our practice question bank Reference all the important topics in our full indexBPP's Practice & Revision Kit also supports this paper.FOR EXAMS FROM 1 SEPTEMBER 2015 TO 31 AUGUST 2016TEXT

First edition 2007Eighth edition April 2015ISBN 9781 4727 2683 4Previous ISBN 9781 4727 1089 5eISBN 9781 4727 2761 9British Library Cataloguing-in-Publication DataA catalogue record for this bookis available from the British LibraryAll rights reserved. No part of this publication may bereproduced, stored in a retrieval system or transmitted, inany form or by any means, electronic, mechanical,photocopying, recording or otherwise, without the priorwritten permission of BPP Learning Media Ltd.We are grateful to the Association of Chartered CertifiedAccountants for permission to reproduce pastexamination questions. The suggested solutions in thepractice answer bank have been prepared by BPPLearning Media Ltd, unless otherwise stated.Published byBPP Learning Media LtdBPP House, Aldine PlaceLondon W12 8AAwww.bpp.com/learningmediaPrinted in the United Kingdom byRICOH UK LimitedUnit 2Wells PlaceMersthamRH1 3LGYour learning materials, published by BPP LearningMedia Ltd, are printed on paper obtained fromtraceable sustainable sources. BPP Learning Media Ltd2015ii

ContentsPageIntroductionHelping you to passStudying P5The exam paperSyllabus and study guidevviixiixiiiPart A Strategic planning and control123Introduction to strategic management accounting . 3Performance management and control of the organisation . 45Business structure, IT developments and other environmental and ethical issues . 63Part B External influences on organisational performance4Changing business environment and external factors. 133Part C Performance measurement systems and design56Performance management information systems . 163Management information, recording and processing and management reports. 197Part D Strategic performance measurement78910a10b1112Performance hierarchy. 237Scope of strategic performance measures in the private sector . 273Divisional performance and transfer pricing issues . 323Strategic performance measures in not for profit organisations. 353Non-financial performance indicators. 375The role of quality in management information and performance measurementsystems . 395Performance measurement: strategy, reward and behaviour . 445Part E Performance evaluation and corporate failure131415Alternative views of performance measurement and management . 487Strategic performance issues in complex business structures. 527Predicting and preventing corporate failure . 557Part F Current developments and emerging issues in performancemanagement16Current developments, issues and trends. 585Mathematical tables615Practice question bank619Practice answer bank641Index695Review formContentsiii

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Helping you to passBPP Learning Media – Approved Content ProviderAs an ACCA Approved Content Provider, BPP Learning Media gives you the opportunity to use studymaterials reviewed by the ACCA examination team. By incorporating the examination team's commentsand suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media StudyText provides excellent, ACCA-approved support for your studies.The PER alertBefore you can qualify as an ACCA member, you have to not only pass all your exams but also fulfil a threeyear practical experience requirement (PER). To help you to recognise areas of the syllabus that youmight be able to apply in the workplace to achieve different performance objectives, we have introducedthe 'PER alert' feature. You will find this feature throughout the Study Text to remind you that what youare learning to pass your ACCA exams is equally useful to the fulfilment of the PER requirement.Your achievement of the PER should now be recorded in your online My Experience record.Tackling studyingStudying can be a daunting prospect, particularly when you have lots of other commitments. The differentfeatures of the text, the purposes of which are explained fully on the Chapter features page, will help youwhile studying and improve your chances of exam success.Developing exam awarenessOur Texts are completely focused on helping you pass your exam.Our advice on Studying P5 outlines the content of the paper, the necessary skills you are expected to beable to demonstrate and any brought forward knowledge you are expected to have.Exam focus points are included within the chapters to highlight when and how specific topics wereexamined, how they might be examined in the future, and how different topics within the syllabus fittogether.Using the Syllabus and Study GuideYou can find the syllabus and Study Guide on pages xiii-xxiii of this Study Text.Testing what you can doTesting yourself helps you develop the skills you need to pass the exam and also confirms that you canrecall what you have learnt.We include Questions – lots of them – both within chapters and in the Practice Question Bank, as well asQuick Quizzes at the end of each chapter to test your knowledge of the chapter content.Introductionv