• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

The use of Forecasts compare to budgets clarifications

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › The use of Forecasts compare to budgets clarifications

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by Ken Garrett.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • August 26, 2017 at 9:04 pm #403705
    narmeenzang
    Member
    • Topics: 8
    • Replies: 4
    • ☆

    Hi,

    I understand the main characteristics of a budget and a forecast but I need some clarification on the purpose of a forecast.

    If a company reviews Actuals compared to a budget periodically and assess material variances e.g to drive operational decisions to work towards achieving the budget, why then are forecasts needed?

    Forecast is a tools to predict future sales/volume activity taking into consideration the environment, it is current and updated continuously.
    Is it to be compared to budgets? If so, what purpose is it for managers to know what is likely to happen if the target to achieve is the budget itself regardless of the forecast? Is it to have an idea on the likely hood of meeting the budget so that efforts can be prioritised to meet the budget?

    Thank you.

    August 27, 2017 at 2:46 pm #403775
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    I don’t think that the P3 examiner is very interested in the academic difference between forecasts and budgets.

    In my book, a forecast (eg a sales forecast) is an attempt to predict the future (eg sales volumes and revenues). Budgets then flow from forecasts sales, production, cash flow etc.

    Both should be updated when necessary to keep them relevant.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • julio99 on Impairments – Impairment (CGU) – ACCA Financial Reporting (FR)
  • effy.sithole@gmail.com on EPS – diluted EPS Example – ACCA Financial Reporting (FR)
  • Ken Garrett on The Finance Function in the Digital Age – CIMA E1
  • DeborahProspect on ACCA SBR Specimen Exam 2 Question 1
  • darshan.69 on Chapter 9 Pension Schemes TX-UK FA2023

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in