(B)/W and Capacity: Difference between pages

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(Better)/Worse
1. ''Law''.
Anyone can enter a contract, whether or not they have ‘capacity’ to do so. But if an individual who lacks contractual capacity enters a contract, the contract may not be enforceable.
Problems of capacity may arise in relation to minors, mental incapacity or intoxication.


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.  
2.
More generally, the ability to absorb or hold.  For example, tax capacity or borrowing capacity.
(Tax capacity being the ability to use tax reliefs efficiently to shelter otherwise taxable profits or gains. Borrowing capacity being the maximum amount of borrowing which can be sustained based on a firm's expected future cashflows and its assets.)


3. ''Banking''.
In relation to the individuals whom a bank will authorise to open and operate a bank account, the appropriate level of seniority and the role of the individuals within the business of the customer.


When the label is (B)/W the positive numbers are worse than forecast, budget, prior period or other comparative number.
== See also ==
 
* [[Contract]]
Under this convention, negative numbers are good news, also known as 'favourable'.
 


On the other hand, when the label is B/(W) the opposite applies - negative numbers would be worse and adverse.
[[Category:Regulation_and_Law]]
 
Under the B/(W) sign convention positive numbers are better and favourable.
 
 
== See also ==
*[[Variance]]
*[[Adverse]]
*[[YTD]]
*[[Inflow/(outflow)]]
*[[Mostly positive]]
*[[Variance analysis]]

Revision as of 08:33, 8 October 2013

1. Law. Anyone can enter a contract, whether or not they have ‘capacity’ to do so. But if an individual who lacks contractual capacity enters a contract, the contract may not be enforceable. Problems of capacity may arise in relation to minors, mental incapacity or intoxication.

2. More generally, the ability to absorb or hold. For example, tax capacity or borrowing capacity. (Tax capacity being the ability to use tax reliefs efficiently to shelter otherwise taxable profits or gains. Borrowing capacity being the maximum amount of borrowing which can be sustained based on a firm's expected future cashflows and its assets.)

3. Banking. In relation to the individuals whom a bank will authorise to open and operate a bank account, the appropriate level of seniority and the role of the individuals within the business of the customer.

See also