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Dictionary by pitch.dog
Budgets, forecasts & scenarios · Working

Favourable variance

Also called: positive variance

ELI5

A variance improving the selected outcome relative to plan, with context determining whether lower or higher is favourable.

Used in conversation

“Can you walk me through how favourable variance works in the model?”

Pitch context

You will see “Favourable variance” in financial models, budgets, board packs and investor materials when the discussion reaches budgets, forecasts & scenarios.

Why it matters: In budgets, forecasts & scenarios, different calculation boundaries, periods or accounting treatments can change the number and the decision.

Caution

Calculation, recognition and disclosure can vary by accounting framework, company policy and reporting context.

When the words have to travel

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Sources & evidence · 5

Direct term-level sources and supporting source families.