Financial plan

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Financial plan
Accounting
Historical cost accounting
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Management accounting
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[1]
In general usage, a financial plan
[2]
is a series of steps or goals used by an individual or business, the progressive
and cumulative attainment of which is designed to accomplish a financial goal or set of circumstances, e.g.
elimination of debt, retirement preparedness, etc. This often includes a budget which organizes an individual's
finances and sometimes includes a series of steps or specific goals for spending and saving future . This plan
allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for
short-term and long-term savings. A financial plan is sometimes referred to as an investment plan, but in personal
finance a financial plan can focus on other specific areas such as risk management, estates, college, or retirement.
Context of Business
In business, a financial plan can refer to the three primary financial statements (balance sheet, income statement, and
cash flow statement) created within a business plan. Financial forecast or financial plan can also refer to an annual
projection of income and expenses for a company, division or department.
[3]
A financial plan can also be an
estimation of cash needs and a decision on how to raise the cash, such as through borrowing or issuing additional
shares in a company.
[4]
While the common usage of the term "financial plan" often refers to a formal and defined series of steps or goals,
there is some technical confusion about what the term "financial plan" actually means in the industry. For example,
one of the industry's leading professional organizations, the Certified Financial Planner Board of Standards, lacks
any definition for the term "financial plan" in its Standards of Professional Conduct publication. This publication
outlines the professional financial planner's job, and explains the process of financial planning, but the term
"financial plan" never appears in the publication's text.
[5]
Financial plan
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Issues of Definition
Textbooks used in colleges offering financial planning-related courses also generally do not define the term 'financial
plan'. For example, Sid Mittra, Anandi P. Sahu, and Robert A Crane, authors of Practicing Financial Planning for
Professionals
[6]
do not define what a financial plan is, but merely defer to the Certified Financial Planner Board of
Standards' definition of 'financial planning'.
Because of the lack of a formal definition in industry literature, and in major textbooks on the subject, the term
'financial plan' is merely inferred from the defined process of 'financial planning'.
References
Wikimedia Commons has media related to Financial Planning.
[1] http:/ / en. wikipedia. org/ w/ index. php?title=Template:Accounting& action=edit
[2] https:/ / www. moneysmart.gov. au/ tools-and-resources/ calculators-and-tools/ budget-planner
[3] Meigs, Walter B. and Robert F. Financial Accounting, 4th ed. (McGraw-Hill Book Company, 1970) pp. 187-188.
[4] Barron's Finance, 4th ed, 2000, p.578.
[5] "Standards Of Professional Conduct". (http:/ / www.cfp. net/ Downloads/ 2010Standards. pdf) Certified Financial Planner Board of
Standards. Rev. January 2010. Retrieved 2011-09-24.
[6] [6] Sid Mittra, Anandi P. Sahu, Robert A Crane. "Practicing Financial Planning for Professionals" (Practitioners' Edition), 10th Edition.
(Rochester Hills Publishing, Inc., 2007) sec. 1-3.
Article Sources and Contributors
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Article Sources and Contributors
Financial plan Source: http://en.wikipedia.org/w/index.php?oldid=622521563 Contributors: A. B., AbsolutDan, Arjayay, Babyboomer57, Bender235, Booyabazooka, C hammervold10, Caltas,
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