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(Better)/Worse
''Variance analysis''


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.  
(Better)/Worse.


A label and sign convention in financial reporting.


When the label is (B)/W the positive numbers are worse than forecast, budget, prior period or other comparative number.  
It is designed to aid the interpretation of differences or changes, by specifying a consistent convention.


Under this convention, negative numbers are good news, also known as 'favourable'.


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


On the other hand, when the label is B/(W) the opposite applies - negative numbers would be worse and adverse.  
Good news is also known as a 'favourable variance'.


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





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.


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