ⓘ Time horizon

                                     

ⓘ Time horizon

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. A time horizon is a physical impossibility in the real world.

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". One hundred years, sometimes considered equal to seven generations, is a time horizon often cited by the ancient Iroquois and modern Greens. 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 Organizations SIMPOL campaign.

Also, in terms of physics, the term "time horizon" is also synonymous with event horizon, first identified in Stephen Hawkings A Brief History of Time. Hawking stated that the time horizon is the boundary that separates a black hole from other celestial bodies. Even time and light cannot escape once trapped in the black hole.

                                     
  • In astrophysics, an event horizon is a boundary beyond which events cannot affect an observer. John Michell proposed in 1784 that near compact massive
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  • The particle horizon also called the cosmological horizon the comoving horizon in Dodelson s text or the cosmic light horizon is the maximum distance
  • Horizon Records was an American independent record label founded in 1960 by Dave Hubert. Horizon was originally a folk and blues label distributed by World
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  • period of time there had been no cycle races on Khreshchatyk. But in 2008, the capital cycling was revived and acquired a new name - Race Horizon Park, and
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  • Horizon Air Industries, Inc., operating as Horizon Air, is a regional airline based in SeaTac, Washington, United States. Horizon Air and its sister carrier
  • Event Horizon is a 1997 science fiction horror film directed by Paul W. S. Anderson and written by Philip Eisner. It stars Laurence Fishburne, Sam Neill
  • time period. The term derives from similar ones in geology, horizon or marker horizon but where these have natural causes, archaeological horizons are