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Better / (Worse).
''Variance analysis - sign conventions''.


A label in financial reporting to indicate whether positive differences are good news - also known as 'favourable', or more simply better.  
Better/(Worse).


When the label is B/(W) the positive numbers are better than budget or prior period.  
A label and sign convention in financial reporting.


When the label is (B)/W the opposite applies - negative numbers would be better and favourable.  
It is designed to aid the interpretation of differences or changes, by specifying a consistent convention.
 
 
Under the B/(W) convention, good news is denoted by a POSITIVE number.
 
Good news is also known as a 'favourable variance'.
 
For example, a cost saving or an income improvement.
 
A common example is a better actual result, compared with an earlier forecast.
 
 
 
Under the B/(W) convention NEGATIVE numbers are bad news, 'worse'.
 
Bad news is also known as an 'adverse' variance.
 
 
=====(B)/W convention=====
 
Sometimes the opposite convention is used.
 
This is the (B)/W convention.
 
Under the (B)/W convention - positive numbers are worse, i.e. adverse.
 
Under the (B)/W convention NEGATIVE (bracketed) numbers are better and favourable.  




== See also ==
== See also ==
*[[Adverse]]
*[[Favourable]]
*[[Inflow/(outflow)]]
*[[Mostly positive]]
*[[Sign convention]]
*[[Variance]]
*[[Variance]]
*[[Adverse]]
*[[Variance analysis]]
*[[YTD]]
 
[[Category:Risk_reporting]]

Latest revision as of 13:37, 22 August 2019

Variance analysis - sign conventions.

Better/(Worse).

A label and sign convention in financial reporting.

It is designed to aid the interpretation of differences or changes, by specifying a consistent convention.


Under the B/(W) convention, good news is denoted by a POSITIVE number.

Good news is also known as a 'favourable variance'.

For example, a cost saving or an income improvement.

A common example is a better actual result, compared with an earlier forecast.


Under the B/(W) convention NEGATIVE numbers are bad news, 'worse'.

Bad news is also known as an 'adverse' variance.


(B)/W convention

Sometimes the opposite convention is used.

This is the (B)/W convention.

Under the (B)/W convention - positive numbers are worse, i.e. adverse.

Under the (B)/W convention NEGATIVE (bracketed) numbers are better and favourable.


See also