ACCA Strategic Professional · Advanced Performance Management · Budgetary planning and control
Brindle Retail adopts a rolling forecast. At the end of each quarter it adds a new quarter so that four quarters always remain in view. The finance director says this approach, rather than a static annual budget, is mainly intended to:
A rolling forecast keeps a constant planning horizon, here four quarters, and lets management revise assumptions as new information arrives. It does not guarantee accuracy, remove resource allocation or remove performance measurement.
- AGuarantee that actual results will equal the forecast
- BRemove the need for any resource allocation decisions
- CKeep the planning horizon constant and update assumptions as new information emergesCorrect
- DEliminate the need for any performance measurement
Explanation
A rolling forecast maintains a constant forward horizon and updates assumptions regularly. It does not guarantee accuracy, and resources still need allocating and performance still needs measuring. Options claiming otherwise misstate its purpose.
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