Forecast
A forecast is an estimate of what is expected to happen, based on available evidence and assumptions. It can inform a budget, but a budget may also represent a target, authorised plan or negotiated commitment. Forecasts should be updated when relevant information changes rather than held fixed merely to preserve an old target. State the horizon, method and uncertainty; numerical precision does not guarantee accuracy.
Worked example
An annual sales budget targets $1 million. New market information leads to a latest forecast of $900,000, highlighting a gap requiring action rather than silently rewriting the original target.
Common mistake
Do not confuse an aspiration with an unbiased expectation or assume a more detailed model removes uncertainty.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| ACCA | PM | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |