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''Variance analysis''.
''Variance analysis''.


(Better)/Worse.
(Better) / Worse.


A label and sign convention in financial reporting.
A label and sign convention in financial reporting.

Revision as of 12:39, 31 January 2018

Variance analysis.

(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 NEGATIVE (bracketed) 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 POSITIVE 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 - negative numbers are worse (adverse).

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


See also