AUD Prospective Financial Information · Updated November 2026
Forecast or Projection: Is Management Predicting or Asking What If?
Forecast reflects what management expects. Projection includes one or more hypothetical assumptions.
Financial forecast
Based on assumptions management expects to exist and actions management expects to take.
Financial projection
Includes one or more hypothetical assumptions and answers a what-if question.
Example
A signed-location growth plan can support a forecast, while modeling an uncommitted acquisition is more like a projection.
Use restrictions
Distribution and reporting considerations can differ depending on the prospective statement and engagement.
The takeaway
Forecast asks what management expects. Projection asks what happens under a hypothetical scenario.
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FAQ
Is every budget a projection?
No.
Can projections include hypothetical assumptions?
Yes.
Why does the distinction matter?
It affects use and reporting considerations.