Prospective financial information
Prospective financial information is financial information drawn up to a date in the future, including significant areas of market reporting such as profit forecasts, changes in expectations and estimates of future funding requirements. The new guidance emphasizes that markets and investors are likely to find PFI helpful if it follows the principles of proper disclosure, business analysis, and subsequent validation [Croner-i].
Prospective financial information can include financial statements or one or more elements of financial statements. It may be prepared as an internal management tool, for example, to assist in evaluating a possible capital investment, or for distribution to third parties in, for example:
-a prospectus to provide potential investors with information about future expectations.
-an annual report to provide information to shareholders, regulatory bodies, and other interested parties.
-a document for the information of lenders, which may include, for example, cash flow forecasts [International Standard on Assurance Engagements 3400].
Financial Reporting - Prospective financial information - The future of reporting. Croner-i. Retrieved from: https://www.accountancydaily.co/financial-reporting-prospective-financial-information-future-reporting
International Federation of Accountants (IFAC). (2010). International Standard on Assurance Engagements 3400. The Examination of Prospective Financial Information. Retrieved from: https://www.ifac.org/system/files/downloads/b013-2010-iaasb-handbook-isae-3