In financial statements numbers are sometimes given with parentheses around them, while other numbers appear without parentheses. What does it mean if a number is enclosed by parentheses?
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2Related: money.stackexchange.com/questions/80187– D StanleyFeb 13, 2019 at 16:09
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@DStanley Too bad the question got closed by 1 admin...– Franck DernoncourtFeb 15, 2019 at 7:10
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1@FranckDernoncourt Agreed, and I voted to re-open the question since financial statement analysis is on-topic per this meta question– D StanleyFeb 15, 2019 at 14:08
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1 Answer
It means the number is negative. It's an alternate way of showing negative numbers versus prefacing with a negative sign (-)
In some cases, a negative value also has a different name. For example you'll often see
Net Profit (Loss) : (10,000)
Where the parentheses means that it was a loss and not a profit. Mathematically it's the same as a "negative profit" but it is used to keep headings consistent (it would be harder to analyze than if you used a different heading to indicate a profit or a loss).
answered Feb 13, 2019 at 16:05
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46And as info: the reason this is done is because "()" is WAY better to see - particualrly historically when print quality may be dubious at times - than a "-" before the number. Less possibility for mistakes.– TomTomFeb 13, 2019 at 18:11
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1To me, this is way less intuitive than simply using a negative sign Jul 2, 2019 at 19:59
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@KolobCanyon As the comment states, intuition is not the goal, clarity is. Many finance rules go back before computers, where a negative sign might be missed or even just misinterpreted. In the finance world, the use of parentheses is pretty universally understood. Jul 2, 2019 at 20:13