Pro forma

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Tibiqui

New Member
Ecuadorian Spanish/ Brazilian Portuguese
Hi everyone!
I would like to understand the usage of "pro forma/ proforma" in financial terms.

Second how to use "pro forma" with the following words: financial statements; budget; forecast and cash flows.

Finally, their real meanings of these words; i.e. "pro forma financial statments" are requested when...............
Greets!
Sergio
 
  • timpeac

    Senior Member
    English (England)
    "Pro forma" is a term indicating an accepted pattern. "Pro forma financial statements" to me would mean example financial statements showing where certain figures conventionally go, but where the numbers themselves don't reflect a real situation.
     

    Tibiqui

    New Member
    Ecuadorian Spanish/ Brazilian Portuguese
    Thanks for your quick reply...

    Then, there is a sense of "non standard" financial info when using pro forma.

    Regarding your comment, the figures are not real because they are "estimated" to comply budgets and forecast cash flows, for instance.

    Appreciated very much for your reply.
    Sergio
     

    yelppuppy

    New Member
    Chinese - Mandarin
    Regarding your comment, the figures are not real because they are "estimated" to comply budgets and forecast cash flows, for instance.

    Sergio
    Although I'm not a native English speaker, I'm a CPA, and I can tell you a little bit more what pro-forma means for accountants/financial analysts.

    You're right in that you can think of Pro-Forma as non-standard. To be exact though, the reason it's called Pro-Forma is that in the US, we have Generally Accepted Accounting Principles (GAAP) that publicly traded companies have to comply. Any financial statements that don't follow GAAP are called Pro-Forma, and they don't have to be estimates or forecasts.

    An example is the personal pro-forma financial statements you provide to a bank when applying for a loan. The financial statements are by no means estimates, but they are Pro-Forma nonetheless.

    I assume it applies to other countries as well, because every country has its own version of GAAP or IAR.
     

    Packard

    Senior Member
    USA, English
    Occasionally we are asked to send out a "pro forma invoice" by our customers.

    This is an invoice for merchandise that has not yet been shipped and would not properly be invoiced at that time. We type these invoices outside the accounting system.

    When the actual merchandise is shipped a proper invoice would be rendered.
     

    Tibiqui

    New Member
    Ecuadorian Spanish/ Brazilian Portuguese
    I do really appreciate all your valuable comments. I believe that now it is clear the meaning of "pro forma or proforma" (as I have seen in the dictionary there are two ways to write this word)
    Sergio
     
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