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Introduction
Reporting on variances either actual versus budget, this year versus last year
is a common financial reporting format. Two methods are generally used when
you are reporting on variances.
In the simpler method, one of the two amounts being compared is deducted from
the other. No allowance is made for the type of accounts being reported. For
example, if actual minus budget results in a positive umber, then regardless of the
account type (revenue or expense) the variance is said to be positive. This type of
variance is known as over/ (under) variances in the upcoming exercises.
In the second method of variance reporting, known as favorable/(unfavorable),
the type of account is also taken into consideration. For example, in revenue
accounts, if actual results are higher than those budget the variance is displayed
as favorable. However, if actual expenses are higher than budget, then that
variance is displayed as unfavorable.
The key to the second method is the XCR print control used exclusively in
calculated variance columns. When XCR matches up with a C in the normal
balance f a row, it reverses the sign of the variance calculation result. Therefore,
Cs are also place on total rows that related to accounts display a C such as Net
Sales or Net Income.
Over/(Under) Variances
Although not as common a variance display as favorable/(unfavorable), the
over/(under) method is a straightforward method for comparing he difference in
two amounts.
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Generate Report
To generate the report, follow these steps:
1. Click the Company drop-down arrow and select USMF.
2. Click the Column drop-down arrow and select Actual Budget Over
Under.
3. Click on the Settings tab and select the Other formatting option,
Display negative numbers in red. Clear the Display rows with no
amounts option.
4. Update the Spaces between columns to 1.
5. Save the report definition and then click Generate Report.
Notice that the complete report displays all negative values in red, while the
over/under column reports the difference of actuals results, minus budget
expectations.
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Favorable/(Unfavorable) Variances
The column design for favorable/(unfavorable) reporting is similar to the
over/under design, with two primary differences: the calculation formula is
reversed and the XCR print control is activated.
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Re-generate a report
Return to the report definition to generate the revised design.
1. Click the Open Report Definition icon.
2. Click Generate Report. The generated report displays.
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Summary
Variance reports are designed when users want to display the difference between
two columns of results. The two methods of designing variance reports are:
over/(under) and favorable/(unfavorable). When using the
favorable/(unfavorable) method, the print control XCR is applied in combination
with the C normal balance code in the row definition to present the correct sign
on the variance. Variances can be presented in dollar or percentage formats.
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