I live in Qld where Capital Works Funds (or Sinking Fund Forecasts) are mandatory. I have always found these documents to be extremely useful and well worth the professional expense.
A forecast is usually prepared by a Quantity Surveyor (though there’s no legal requirement for that in Qld) who inspects the site. They’re looking for what works need doing and the condition of infrastructure so they can then estimate how long it’s likely to last and what will or won’t need replacing.
Then they do some complicated calculations to work out how much those works will cost in the future and put the whole lot into a comprehensive report breaking down the collection into specific time periods.
Quite literally the Sinking Fund Forecast tells a strata owners corporation how much to collect and when to collect it.
Quantity Surveyors provide 15 year forecasts. To remain current the document only needs to be updated every five years. The best use of a Sinking Fund Forecast is if the document is updated regularly to account for unplanned expenditure.