ACCA MA Syllabus B. Data Analysis And Statistical Techniques - Price movements - Notes ^{6 / 12}

An aspect of budgeting which requires great care is the estimation of future costs based on historical figures in an environment of rising prices. When using past accounting data as the basis for forecasting future figures, old costs need to be adjusted to show what they would be at current, or rather at next year’s, prices. The Retail Price Index (RPI) is a government produced index used to measure the general rate of price change in the economy.