Assumption
An assumption is something treated as true for the purpose of reasoning, planning or analysis without being established as certain. Assumptions allow decisions to be modelled but should be explicit, plausible and checked where possible. Results depend on them, so important uncertainties may need sensitivity analysis, scenarios or further evidence. An assumption can be a deliberate simplifying condition rather than a mistaken belief.
Worked example
A project appraisal assumes demand of 5,000 units. The analyst explains the market evidence, tests lower demand and identifies the point at which the project would no longer meet its objective.
Common mistake
Do not present an assumption as a verified fact or hide a favourable assumption in a calculation. Distinguish a model input from a deeply held cultural assumption when the context changes.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |
