Analyzing prospective financial information

Exploring the complex area of financial forecasting

James Weaver

James Weaver

Principal, Valuation & Business Modeling Services, KPMG US

+1 678-654-2655

Frederik Bort

Frederik Bort

Managing Director, Dept. of Professional Practice, KPMG US

+1 212-954-2980

Analysis of prospective financial information (PFI), also commonly referred to as financial forecasts, is critical when evaluating a company’s growth prospects and financial position. Recently, the level of focus on PFI has substantially increased as a result of various factors. As such, the use of PFI has been the subject of growing scrutiny from auditors and regulators, often requiring a detailed analysis. Given the increase in focus on PFI, we have created a series of documents called Analyzing Prospective Financial Information to cover relevant topics.

We believe this series will be of interest to anyone frequently dealing with PFI in their role. This may include professionals in financial reporting, corporate development, FP&A, or similar positions.

Analyzing Prospective Financial Information - Report Series:

PCAOB Inspection Results
In this issue, we summarize common issues identified in PCAOB Part I comments pertaining to PFI.
Relevant Guidance to Consider
In this issue, we discuss some of the PFI guidance issued by the American Institute of Certified Public Accountants (AICPA), Securities and Exchange Commission (SEC), and valuation profession.
Assessing Forecasting Bias
In this issue, we describe how one can determine if an indication of bias is present, potentially leading to overly optimistic or conservative estimates.
CEIV Impact on Financial Projections
In this issue, we review what to expect if pursuing Certified in Entity and Intangible Valuations (CEIV) credentials.
Assessing Forecasting Accuracy
In this issue, we discuss the process of quantifying the accuracy of financial forecasts to evaluate their reliability.



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