ICAEW.com works better with JavaScript enabled.

Principles for preparing financial forecasts or projections

Brought to you by the Corporate Finance Faculty, ICAEW’s technical release TECH 04/20CFF Guidance for preparers of prospective financial information (PFI) is a preparation framework for a high standard of financial forecasts or projections.


The preparer of any PFI will:

  1. take user needs into account - identifying the intended user and purpose of the information - so as to make it relevant 
  2. ensure the information is rooted in business analysis, and is thus reliable
  3. make reasonable disclosure of the context - including risks and uncertainties - so that it is understandable
  4. be accountable for subsequent validation of the information, ensuring that it is comparable with the actual outcome

Download the guidance

TECH 04/20CFF Guidance for preparers of prospective financial information.

Download now

Published by ICAEW’s Corporate Finance Faculty, TECH 04/20CFF:

  • defines PFI and introduces and explains the preparation principles
  • includes illustrative general guidance that codifies best practice in the preparation process
  • explains regulatory requirements for PFI prepared in connection with regulated capital markets transactions
  • features specific application guidance for preparing PFI where there is a prescribed form eg, in connection with regulated capital markets transactions (statements of sufficiency of working capital, profit forecasts and cost saving statements)

The guidance may also be useful for those reviewing, approving or using PFI.

The effective date for TECH 04/20CFF is 15 October 2020. Early adoption of the guidance is encouraged.

Implications of COVID-19

COVID-19 has brought significant uncertainty for many businesses, creating challenges for the preparation of PFI. The preparation principles in the guidance are relevant to forecasting in an uncertain environment. TECH 04/20CFF is explicit that PFI is subject to inherent uncertainties; including external factors. The guidance advocates reasonable disclosure of the uncertainty, and of the specific assumptions underpinning the PFI.

It was previously anticipated that TECH 04/20CFF would be published in March 2020 and effective from 30 June 2020. This was postponed so as not to distract businesses from navigating the COVID-19 crisis and its impact, and the effective date is now 15 October 2020.

TECH 04/20CFF is designed for proportionate and modular application, and can accommodate more application guidance if there is demand.

ICAEW’s Corporate Finance Faculty is open to feedback on use of the guidance, and to suggestions for application guidance in other situations. Please contact us at cff@icaew.com with your comments.

TECH 04/20CFF replaces ICAEW’s guidance Prospective Financial Information: Guidance for UK Directors, which was published in 2003 and which will be withdrawn on 15 October 2020.

Download relevant sections

Each Part III section should be read in conjunction with Parts I & II


Open AddCPD icon

Add Verified CPD Activity

Introducing AddCPD, a new way to record your CPD activities!

Log in to start using the AddCPD tool. Available only to ICAEW members.

Add this page to your CPD activity

Step 1 of 3
Download recorded
Download not recorded

Please download the related document if you wish to add this activity to your record

What time are you claiming for this activity?
Mandatory fields

Add this page to your CPD activity

Step 2 of 3
Mandatory field

Add activity to my record

Step 3 of 3
Mandatory field

Activity added

An error has occurred
Please try again

If the problem persists please contact our helpline on +44 (0)1908 248 250