Management Glossary

  Search Results: pro forma
pro forma
Literally, pro forma is Latin for "as a matter of form". The term has at least a couple of business applications:
  1. A pro forma document is one that is produced in advanced of the actual business document. For example, a price quote that is created in a format identical to the format of the invoice that will be generated should the sale be completed is referred to as a "pro forma" invoice.
  2. Pro forma financial statements are those created excluding extraordinary items that will likely not be repeated every year (such as profit from the sale of a subsidiary, receipt or payment of funds as a result of a settlement of a large lawsuit, etc.) Pro forma statements have to be produced in addition to rather than instead of the filed statements because the pro forma statements do not follow generally accepted accounting principles.
Contributed by: Managerwise Staff
See: generally accepted accounting principles

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