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?


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).

  • 46
    And 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.
    – TomTom
    Feb 13 '19 at 18:11
  • 1
    To me, this is way less intuitive than simply using a negative sign Jul 2 '19 at 19:59
  • @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.
    – D Stanley
    Jul 2 '19 at 20:13

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