Page 219 - Microsoft Word - 00 P1 IW Prelims.docx
P. 219

Prospective financial information





                           Types of PFI





               1.1 Definitions

                             Prospective financial information (PFI)


                             Financial information based on assumptions about events that may
                             occur in the future and possible actions by an entity. It may be in the
                             form of a forecast or a projection, or a combination of both.

                             Forecast

                             PFI prepared on the basis of assumptions as to future events that
                             management expects to take place and the actions management
                             expects to take (best-estimate assumptions).

                             Projection

                             PFI prepared on the basis of hypothetical assumptions about future
                             events and management actions that are not necessarily expected to
                             take place, or a mixture of best estimate and hypothetical assumptions.

                             Hypothetical illustration

                             A depiction of anticipated outcomes based on uncertain future events
                             and actions.

                             Target

                             A desired future outcome aimed for by an organisation.




























                                                                                                     215
   214   215   216   217   218   219   220   221   222   223   224