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Time horizon information


A time horizon, also known as a planning horizon, is a fixed point of time in the future at which point certain processes will be evaluated or assumed to end. It is necessary in an accounting, finance or risk management regime to assign such a fixed horizon time so that alternatives can be evaluated for performance over the same period of time.

Although short term horizons such as end of day, end of week, end of month matter in accounting, generally it is mere summing-up and the simplest mark to market processes that take place at these short term horizons. No scenario analysis or mark to future activities are usually undertaken for such short periods, except for very large portfolios.

The most common horizons used in planning are one "quarter" (a quarter year, or three months), a year, two years, three years, four years (especially in a representative democracy where this is a quite common term of office and election cycle) and five years (in corporate planning). More far-sighted companies and government agencies may also use between ten and one hundred years. Thirty years is often used in mortgage contracts and US Treasury bonds such as the "long bond". The Forestry Commission in the UK plans over a century into the future.

Agreeing on a common time horizon for action is particularly important in global policy, as each participant will have very different time horizon habits. Achieving simultaneous policy is quite difficult without an agreement, as those taking action early may be seriously disadvantaged in competition with those taking action late on a regulatory matter. One attempt to bring about a global simultaneous policy is being attempted by the International Simultaneous Policy Organization's SIMPOL campaign.[1]

  1. ^ Simpol.org - Campaign concept

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Time horizon

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future timeslots in account. This is achieved by optimizing a finite time-horizon, but only implementing the current timeslot and then optimizing again...

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emission of a unit mass of a given substance, accumulated over a chosen time horizon, relative to that of the reference substance, carbon dioxide (CO2). The...

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chauffeur game'. Games with a random time horizon are a particular case of differential games. In such games, the terminal time is a random variable with a given...

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The British Post Office scandal, also called the Horizon IT scandal, involved Post Office Limited pursuing thousands of innocent subpostmasters for shortfalls...

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time steps within a given time horizon as in BPTT. Biological neural networks appear to be local with respect to both time and space. For recursively...

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Hubble horizon, but rather the speed of light multiplied by the conformal time. The existence, properties, and significance of a cosmological horizon depend...

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that network forecasting error for one horizon won't impact the error for another horizon—since each time horizon is typically a unique problem. The joint...

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given portfolio, time horizon, and probability p, the p VaR can be defined informally as the maximum possible loss during that time after excluding all...

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easily remembered and repeated clear: defines a prime goal time horizon: defines a time horizon future-oriented: describes where the company is going rather...

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financial term describing the likelihood of a default over a particular time horizon. It provides an estimate of the likelihood that a borrower will be unable...

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Macroeconomics

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variables are output, unemployment, and inflation.: 39  Besides, the time horizon varies for different types of macroeconomic topics, and this distinction...

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