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(iii) Signi cant Accounting Principles The prospective nancial statements should include disclosure of the signi cant accounting principles used in the statements The basis of accounting and the accounting principles used in the prospective statements are generally those that are expected to be used during the prospective period Thus, if the prospective statements accompany historical nancial statements, this disclosure may be accomplished by referring the reader to the appropriate note in the historical statements If the basis of accounting used in the prospective statements is a comprehensive basis of accounting other than GAAP, the basis used should be disclosed as well as that it is different from GAAP If the basis of accounting used is different from that expected to be used in the historical nancial statements for the prospective period (such as presenting cash- ow forecast for an entity that uses GAAP for its historical nancial statements), the use of a different basis of accounting in the prospective statements should be disclosed The differences in prospective results that are caused by the use of the different basis would usually be reconciled in the statements unless the reconciliation would not be useful If the accounting principles used differ from those expected to be used (such as in a projection that analyzes the effect of a possible change in accounting principles), the use of a different principle in the projection should be disclosed The results in the projection may also be reconciled to those that would result from using the principle used in the historical nancial statements If management expects to change an accounting principle during the prospective period, the change in principle should be re ected in the prospective nancial statements the same way it would be in the historical nancial statements covering the prospective period Other speci c disclosures required for historical nancial statements, such as those regarding pensions and income taxes, are not required for prospective nancial statements (iv) Other Matters The date of preparation of the prospective nancial statements should be disclosed This disclosure provides information to users about how current the information underlying the statements is likely to be The date is generally disclosed in the introduction to the summary of signi cant assumptions Occasionally, management recognizes that users need information for periods beyond its ability to forecast For example, management may plan a re nancing of debt or the introduction of new products after the end of the forecast period Or management may expect expiration of a signi cant contract or future adverse tax consequences to investors If users are considered limited users, management may present projections or partial presentations for the more distant periods If, however, the users are general users, presentation of a projection outside of the forecast period would be considered inappropriate The AICPA Guide (Section 840) provides guidance for disclosure of signi cant postforecast-period matters Such a disclosure should include the following four items: 1 Include a title indicating that it presents information about periods beyond the nancial forecast period 2 Include an introduction indicating that the information presented does not constitute a nancial forecast and indicating its purpose.

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