framtíðarfærslur

Framtíðarfærslur, a term originating from Icelandic, translates to "future entries" or "forward entries" in English. It is a concept primarily used in accounting and financial contexts to describe transactions or financial events that are anticipated to occur in the future but are recorded in the present. This practice is crucial for accurate financial planning, budgeting, and the preparation of financial statements.

The purpose of framtíðarfærslur is to provide a more complete and forward-looking picture of a company's financial position. This includes recognizing potential revenues and expenses before they are realized or incurred. For example, a company might record an anticipated sale that is highly probable to occur in the next fiscal period, or it might accrue for expected future costs like warranty expenses or lease payments.

These entries are based on estimates and projections, and their accuracy depends heavily on the reliability of the information used for forecasting. It is important that framtíðarfærslur are distinguished from actual past transactions. They are essentially anticipatory adjustments made to reflect expected future economic activity.

In accounting standards, such entries are often linked to concepts like accrual accounting, where revenues and expenses are recognized when earned or incurred, regardless of when cash is exchanged. Framtíðarfærslur help ensure that financial reports are not only reflective of past performance but also provide a reasonable indication of future financial implications. The precise treatment and disclosure of framtíðarfærslur can vary depending on the specific accounting framework being followed.