How are planning assumptions reflected in projected financial statements? Is there a standard computational procedure for incorporating assumptions into planned numbers?

Planning assumptions is most important things you do for your company. It imply financial statement numbers that are consistent with the existence of the conditions assumed. The   result – the Finical statement -have too much importance. Regular planning also helps your company deal with change, both inside and outside the company.

Management put into plans by calculating the implied figures and including them in the projected financial statements. There is no universal or fixed method. The appropriate calculation depends on the nature of the item as well as that of the assumption.

The difference between simple, estimated plans and complex, precise plans

simple plan

For simple plan we can say that it has a small number of simple assumptions while

complex plan

We can say that complex plan has a larger number of more detailed assumptions.

complex plan

A complex plan can be inaccurate if the detailed assumptions are wrong or unrealistic.

Can a plan be precise, complex, and inaccurate at the same time? If so, how?

It’s important to realize that the extra work of putting together a detailed plan doesn’t make it a better plan if the assumptions are unrealistic