Pro Forma

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Pro Forma

As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts.

The phrase pro forma, in an appealable decree or judgment, usually means that the decision was rendered not on a conviction that it was right, but merely to facilitate further proceedings.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

pro forma

1) prep. Latin for "as a matter of form," the phrase refers to court rulings merely intended to facilitate the legal process (to move matters along). 2) n. an accountant's proposed financial statement for a business based on the assumption that certain events occurred, such as a 20% increase in annual sales or 6% inflation.

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
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RELATED ARTICLE: Pro forma reporting best practices
Explain why investors should care about the pro forma measure (i.e., why it's value relevant)
Provide a reconciliation of pro forma earnings to GAAP earnings
Prepare pro forma earnings on a consistent basis, or clearly state any change in method
Don't use GAAP terminology to describe a pro forma measure