ACCA 2027 · Expertise
ACCA E4 Finance and Investment
E4 Finance and Investment is a Expertise-level exam in ACCA’s 2027 qualification. It replaces FM (F9) — Financial Management. It is a Session CBE, 3 hours, 100 marks exam with a 50% pass mark, and the first exams run from September 2027.
Key facts
- Level
- Expertise
- Format
- Session CBE · 3 hours · 100 marks
- Pass mark
- 50%
- Replaces
- FM (F9) — Financial Management
- First exams
- September 2027 (session CBE, four sittings a year)
- Syllabus
- 8 sections (A, B, C, D, E, F, G, H), 8 subsections, 35 learning outcomes
- Employability module at this level
- Digital Tech and Innovation
Overview
What E4 covers
E4 Finance and Investment succeeds FM (F9) with an expanded scope covering investment analysis, portfolio theory, and sustainable finance. The core FM syllabus (working capital, investment appraisal, business finance, cost of capital, risk management) is retained. New content includes portfolio theory, the capital asset pricing model (CAPM) application, and ESG considerations in investment decisions.
Exam format
| Part | Detail |
|---|---|
| Section A | 15 × 2-mark OTs (30 marks) |
| Section B | 3 × 10-mark MTQs (30 marks) |
| Section C | 2 × 20-mark constructed response (40 marks) |
| Overall | 3 hours |
Key changes vs FM/F9
- New Section F: Investment Analysis and Portfolio Theory (CAPM application, EMH, valuations)
- New Section H: Sustainable Finance (ESG, green bonds, sustainability-linked loans)
- CAPM calculation expanded from cost of capital to investment analysis context
- Core FM content retained (working capital, investment appraisal, business finance, risk management)
- E4 and E5 linked to BSc university pathway — these are the university partner papers
Syllabus comparison
FM/F9 → E4: topic-by-topic changes
32 changes, from whole sections removed to topics added or raised in intellectual level.
| Change | Area or topic | Detail |
|---|---|---|
| EXAM FORMAT | Overall structure and mark allocation | Sec A 15×2 OTs (30) + Sec B 3×10 cases (30) + Sec C 2×20 CRQs (40) = 100 marks, 3 hrs → IDENTICAL — same structure, same marks, same duration |
| ADDED | Green finance and climate finance | Not in FM → E4 D1c — Discuss and assess appropriateness [2] |
| ADDED | Exchange-traded currency futures (numerical calculations) | FM G3c — identify types and explain use [1]; no numerical questions → E4 F3a(vii) — apply with full calculations [2] |
| ADDED | OTC currency options (numerical calculations) | FM G3c — identify types and explain use [1]; no numerical questions → E4 F3a(viii) — apply with full calculations [2] |
| ADDED | Exchange-traded interest rate futures (numerical calculations) | FM G4b — identify types and explain use [1]; no numerical questions → E4 F4a(iv) — apply with full calculations [2] |
| ADDED | OTC interest rate options (numerical calculations) | FM G4b — identify types and explain use [1]; no numerical questions → E4 F4a(v) — apply with full calculations [2] |
| ADDED | Impact of basis risk on hedging recommendation | Not an explicit standalone outcome in FM → E4 F1c — standalone [1] outcome |
| ADDED | Non-financial factors in investment decisions | Not an explicit outcome in FM investment appraisal → E4 C1g — assess relevance [2] |
| ADDED | Recommend whether project should be accepted | FM D1: calculate/apply methods — no explicit recommendation outcome → E4 C1c — recommend whether project accepted [2] |
| ADDED | Overtrading vs over-capitalisation analysis | FM C1c — discuss central role of WC in FM [2] → E4 B1c — analyse whether overtrading or over-capitalised using financial indicators [2] |
| ADDED | Compare and contrast real-terms vs nominal-terms approaches (separate outcome) | FM D2a — combined apply and compare in single outcome → E4 C2b — explicit standalone compare-and-contrast outcome |
| REMOVED | FM Section A — Financial Management Function (entire section) | FM A1–A4: nature of FM, financial objectives list, stakeholder encouragement mechanisms (reward schemes, governance codes), NFP objectives and VFM → Core strategic content absorbed into E4 A1; NFP, FM-vs-accounting distinction, and stakeholder encouragement mechanisms removed |
| REMOVED | NFP organisations (objectives, VFM, measurement) | FM A4 — dedicated subsection [2] → Not in E4 |
| REMOVED | Stakeholder encouragement mechanisms (reward schemes, corporate governance codes) | FM A3 — managerial reward schemes (share options, PRP); regulatory requirements (governance codes, stock exchange listing regulations) [2] → Not in E4 |
| REMOVED | FM Section H — Employability and Technology Skills (entire section) | FM H1–H4: use technology; work under time pressure; navigate screens; present data → Not in E4 as standalone assessable section |
| REMOVED | Finance for SMEs (FM E5 — entire subsection) | FM E5: SME financing needs [2]; funding gap, maturity gap, inadequate security [2]; government and FI measures [1]; business angels, government assistance, supply chain financing, crowdfunding/P2P [2] → Not in E4 |
| REMOVED | Islamic finance instruments | FM E1d: murabaha, ijara, mudaraba, sukuk, musharaka [1] — no calculations → Not in E4 |
| REMOVED | Nature and features of securities in risk-return trade-off | FM B2d [2] → Not in E4 |
| REMOVED | Public sector liquidity in money markets | FM B3a: money markets provide liquidity for private and public sector [1] → E4 A3d: private sector only |
| RAISED | Pecking order theory | FM E4d [1] — describe → E4 D4d [2] — explain and apply |
| RAISED | Behavioural finance significance | FM F4c [1] — describe significance → E4 E4c [2] — assess significance |
| RAISED | Interest rate risk types (gap exposure, basis risk) | FM G1b [1] → E4 F1b [2] |
| RAISED | Fiscal, monetary, IR and exchange rate policy | FM B1a [1] — awareness level → E4 A2a [2] — application/assessment level |
| CHANGED | IA methods (payback, discounted payback, ROCE, NPV, IRR) | FM D1b–f: five separate outcomes, each “calculate and discuss” [2] → E4 C1b: one combined outcome applying all five methods [2] |
| CHANGED | Simulation in risk and uncertainty | FM D3d: standalone [1] “explain simulation” outcome → E4 C3d: consolidated into [2] “assess usefulness of sensitivity, probability AND simulation” |
| RETAINED | Working capital management core (EOQ, Baumol, Miller-Orr, factoring, ratios) | FM C2 [2] → E4 B2 [2] — same outcomes, same level |
| RETAINED | Investment appraisal core (NPV, IRR, payback, ROCE, leasing, EAC, capital rationing) | FM D1–D4 [2] → E4 C1–C4 [2] — same outcomes, same level |
| RETAINED | Business finance core (WACC, CAPM, M&M, dividend policy, sources of finance) | FM E1–E4 [2] → E4 D1–D4 [2] — same outcomes, same level |
| RETAINED | Business valuations (asset, income, cash flow models; EMH) | FM F1–F4 [2] → E4 E1–E4 [2] — same outcomes, same level |
| RETAINED | FX hedging (traditional methods: invoice currency, netting/matching, leading/lagging, forwards, money market) | FM G3 [2] → E4 F3 [2] — same outcomes, same level (derivatives upgraded separately) |
| RETAINED | IR hedging traditional methods (matching/smoothing, asset/liability, FRAs) | FM G4 [1–2] → E4 F4 [1–2] — same outcomes, same level (derivatives upgraded separately) |
| RETAINED | PPP, IRP, four-way equivalence, yield curves | FM G2 [1–2] → E4 F2 [1–2] — same outcomes, same level |
Syllabus
E4 syllabus breakdown
Every section, subsection and learning outcome in the E4 Finance and Investment syllabus.
AFinancial Management Function
A1The role of financial management
- Understand the financial management function and its objectives
- Understand the relationship between financial management and financial and management accounting
- Understand stakeholder objectives and agency theory
- Understand the economic environment for business
BWorking Capital Management
B1Working capital
- Calculate and manage the cash operating cycle
- Manage inventory, receivables and payables
- Manage cash: cash flow forecasting, investing surplus funds
- Evaluate working capital financing policies
CInvestment Appraisal
C1Investment decisions
- Apply NPV, IRR, payback, discounted payback, ARR
- Apply relevant cash flows and tax in investment appraisal
- Apply capital rationing techniques
- Adjust for inflation in investment appraisal
- Apply risk and uncertainty: sensitivity analysis, expected values, simulation
DBusiness Finance
D1Sources of finance
- Identify and evaluate sources of short, medium and long-term finance
- Understand equity finance: IPOs, rights issues, bonus issues
- Understand debt finance: bonds, convertibles, bank lending
- Understand Islamic finance principles
- Evaluate the finance mix and gearing
ECost of Capital
E1Cost of capital calculations
- Calculate cost of equity using DVM and CAPM
- Calculate cost of debt (pre and post tax)
- Calculate WACC
- Understand Modigliani-Miller theory
- Apply WACC as a discount rate: limitations and adjustments
FInvestment Analysis and Portfolio Theory
F1Investment and portfolio theory
- Understand risk and return in investment
- Apply portfolio theory: diversification, systematic and unsystematic risk
- Apply CAPM in investment decisions
- Understand the efficient market hypothesis
- Evaluate equity valuation methods: P/E ratio, dividend yield, DVM
GRisk Management
G1Financial risk management
- Identify and assess foreign currency risk, interest rate risk
- Apply hedging techniques: forward contracts, money market hedging, futures, options, swaps
- Understand the purpose of derivatives in risk management
HSustainable Finance
H1ESG and sustainable finance
- Understand ESG factors in investment decisions
- Identify sustainable finance instruments: green bonds, sustainability-linked loans
- Understand the role of corporate governance in financial management
- Evaluate the impact of sustainability on cost of capital
ACCA E4: frequently asked questions
What is the ACCA E4 exam format?
E4 Finance and Investment is a Session CBE, 3 hours, 100 marks exam. Structure: Section A: 15 × 2-mark OTs (30 marks) · Section B: 3 × 10-mark MTQs (30 marks) · Section C: 2 × 20-mark constructed response (40 marks) · 3 hours. Pass mark: 50%.
When is the first ACCA E4 exam?
September 2027. New Expertise and Strategic Professional exams start with the September 2027 session. The current syllabus’s last sitting is June 2027.
Which current ACCA paper does E4 replace?
FM (F9) — Financial Management. See the old-to-new paper mapping for every paper.
I passed FM. Do I need to sit E4?
Our mapping links FM Financial Management to E4, and ACCA maps exams passed under the current syllabus to the new structure, so you should not retake equivalent content. Check your full position in the transition planner and confirm with ACCA’s Transition Tool.
What changed in E4 compared with FM/F9?
New Section F: Investment Analysis and Portfolio Theory (CAPM application, EMH, valuations). New Section H: Sustainable Finance (ESG, green bonds, sustainability-linked loans). CAPM calculation expanded from cost of capital to investment analysis context. Core FM content retained (working capital, investment appraisal, business finance, risk management).
Clear FM before June 2027
FM maps to E4. Passing it on the current syllabus before the last sitting means one less exam to sit in the new qualification.