B/(W): Difference between revisions

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(Distinguish the alternative convention.)
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Better / (Worse).
''Variance analysis - sign conventions''.


A label and sign convention in financial reporting to indicate whether positive differences are good news - also known as 'favourable', in other words indicating that the number being compared is 'better' than the one it's being compared with.  
Better/(Worse).


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


Under this convention, negative numbers are unfavourable, also known as 'adverse'.
It is designed to aid the interpretation of differences or changes, by specifying a consistent convention.




On the other hand, when the label is (B)/W the opposite applies - negative numbers would be better and favourable.  
Under the B/(W) convention, good news is denoted by a POSITIVE number.


Under the (B)/W sign convention positive numbers are worse and adverse.  
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]]
*[[YTD]]
*[[Mostly positive]]
 
[[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