(B)/W: Difference between revisions

Revision as of 19:33, 12 May 2017

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.

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.

@@ Line 1: / Line 1: @@
+''Variance analysis''
 (Better)/Worse.
-A label and sign convention in financial reporting to indicate whether positive differences are bad news - also known as 'adverse', in other words indicating that the number being compared is 'worse' than the one it's being compared with.
+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.
-When the label is (B)/W the positive numbers are worse than forecast, budget, prior period or other comparative number.
+=====B/(W) convention=====
-Under this convention, negative numbers are good news, also known as 'favourable'.
+Sometimes the opposite convention is used.
+This is the B/(W) convention.
-On the other hand, when the label is B/(W) the opposite applies - negative numbers would be worse and adverse.
+Under the B/(W) convention - negative numbers are worse (adverse).
-Under the B/(W) sign convention positive numbers are better and favourable.
+Under the B/(W) convention POSITIVE numbers are better and favourable.