Prospective financial information
Prospective financial information consists of financial information based on assumptions about events that may occur and possible actions by an entity. It can include forecasts based on best-estimate assumptions and projections involving hypothetical assumptions.
Worked example
A company prepares a three-year cash-flow forecast based on expected demand and financing plans.
Common mistake
Prospective information is not a guarantee of future results, and the practitioner’s work and report depend on the engagement terms and applicable standard.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Direct | September 2026–June 2027 |