This training provides individuals with the knowledge and skills to build basic and advanced financial statements using Management Reporter.

1. Chapter 9: Variance Reporting
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CHAPTER 9: VARIANCE REPORTING
Objectives
The objectives are:
• Create an over/(under) variance column definition
• Define a report that displays favorable/(unfavorable) variances
• Review sample report design concepts
Introduction
Reporting on variances—either actual versus budget, or this year versus last
year—is a common financial reporting format. Two methods are generally used
when you are reporting on variances.
In the simpler method, one of the two amounts being compared is deducted from
the other. No allowance is made for the type of accounts being reported. For
example, if actual minus budget results in a positive number, then regardless of
the account type (revenue or expense) the variance is said to be positive. This
type of variance is known as over/(under) variances in the upcoming exercises.
In the second method of variance reporting, known as favorable/(unfavorable),
the type of account is also taken into consideration. For example, in revenue
accounts, if actual results are higher than those budgeted, the variance is
displayed as favorable. However, if actual expenses are higher than budget, then
that variance is displayed as unfavorable.
The key to the second method is the XCR print control used exclusively in
calculated variance columns. When XCR matches up with a C in the normal
balance of a row, it reverses the sign of the variance calculation result. Therefore,
Cs are also placed on total rows that relate to accounts displaying a C such as Net
Sales or Net Income.
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Over/(Under) Variances
Although not as common a variance display as favorable/(unfavorable), the
over/(under) method is a straightforward method for comparing the difference in
two amounts.
Over/(Under) Column Definition
The following steps define the process for creating a current period, actual versus
budget report.
1. On the File menu, point to New, and then click Column Definition.
2. In column A, Column Type, double-click and select DESC (Row
descriptions). The default column width of 30 characters can be
updated as you want, however, the changes only display in the
generated report.
3. Repeat step 2 in columns B and C, selecting the FD column type.
4. In column C, double-click the Book Code/Attribute Category, and
select Budget_Original. The categories listed are defined in the
source system.
5. In column D, select the CALC column type.
6. In the Formula field, type "B-C".
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7. Type the following descriptions into the Header 2 row:
a. Column B - "Actual "
b. Column C - "Budget "
c. Column D - "Over/(Under)"
8. Save the column definition with the name "ABV_Cur_OU" and
description "Actual Budget Variance - Current period Over/(Under)".
FIGURE 9.1 ABV_CUR_OU COLUMN DEFINITION
Open a Report Definition
The over/under column design is associated with the detailed income statement
row definition in the following steps.
1. Click the Report Definitions button on the navigation pane.
2. Double-click IS_CBR.
3. On the File menu, click the Save As menu item.
4. Type the name "IS_ABV_OU" and description "Detailed Income
Statement with Over/(Under) variances".
5. Click OK.
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Generate Report
To generate the report, follow these steps:
1. Click the Column drop-down arrow and select ABV_Cur_OU.
2. Update the Default base period to 4. The report date adjusts to
4/30/2011.
3. Click the Output and Distribution tab and verify that the Output
name is IS_ABV_OU.
4. Click the Report tab. Notice that the updated output name displays
in the output and distribution summary information.
5. Click the Settings tab and select the Other Formatting option,
Display negative numbers in red. Clear the Display rows with no
amounts option.
6. Update the Spaces between columns to 1.
7. Save the report definition and then click Generate Report.
Completed Report
Open the report in the Report Viewer.
1. Double-click the Income Statements folder.
2. Double-click IS_ABV_OU.
Notice that the completed report displays all negative values in red, while the
over/under column reports the difference of actual results, minus budget
expectations. All actual results are greater than the budget, except travel expense.
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In favorable/unfavorable variance reporting, all expense-related accounts display
in the opposite presentation, primarily an unfavorable variance. The changes that
are required to report favorable/unfavorable variances are performed in the next
exercise.
3. Close all open reports.
FIGURE 9.2 OVER/(UNDER) VARIANCE REPORT
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Favorable/(Unfavorable) Variances
The column design for favorable/unfavorable reporting is similar to the
over/under design, with two primary differences: the calculation formula is
reversed and the XCR print control is activated.
FIGURE 9.3 FAVORABLE/(UNFAVORABLE) VARIANCE REPORT
Favorable/(Unfavorable) Column
The over/under column design is used as a starting template for the
favorable/unfavorable design that is created in the following steps.
1. Click the Column Definitions button on the navigation pane.
2. Double-click ABV_Cur_OU.
3. On the File menu, click the Save As menu item.
4. Type the name "ABV_Cur_Fav" and update the description to read
"Actual Budget Variance - Current period Fav/(Unfav)".
5. Click OK.
6. Double-click column D, Header 1, and in the Column header text,
type "Favorable/". Click the Format options drop-down arrow and
select None. Click OK.
7. Click in Header 2 and update the text to read "(Unfavorable)".
8. In the Formula, field type "C-B". In this method of variance
reporting, the basis for comparison comes first in the formula.
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9. Double-click the Print Control field, select XCR, and then click
OK.
10. Update the numeric column width to 12 characters.
11. Save the column definition.
FIGURE 9.4 ABV_CUR_FAV COLUMN DEFINITION
How XCR Works
When the XCR print control is included in a calculation column type, the basic
variance formula of actual minus budget or budget minus actual is expanded to
consider the type of account being reported on. The account type is determined
by the placement of Cs in the Normal Balance field of the row definition.
1. Click the Row Definitions button on the navigation pane.
2. Double-click IncStmt_Dtl.
Cs are placed on rows that link to the financial data source to flip the balance of
the account for presentation in the report. If a C is present, XCR reverses the sign
of the result of the variance calculation. Totals do not require a C in non-variance
reporting; however, a C is required to correctly calculate the variance on totals
that will display a credit balance if account presentation had not been flipped.
The Net Sales TOT formula relates directly to row code 190, which contains a C
to flip the presentation of Sales in the reports. The Gross Margin formula relates
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to row code 310, Net Sales, so an indirect relationship exists to the Sales row.
Total Expenses does not display a C, because it carries a debit balance and does
not relate to rows with a C.
View the Report
A new report definition is created based on the over/under report design.
1. Click the Report Definitions button on the navigation pane.
2. Double-click IS_ABV_OU.
3. On the File menu, click the Save As menu item.
4. Update the name to read "IS_ABV_Fav". Update the description
accordingly and then click OK.
5. Click the Column drop-down arrow and select ABV_Cur_Fav.
6. Click the Output and Distribution tab and if needed, update the
output name to "IS_ABV_Fav".
7. Save the report definition and then click Generate Report.
8. Double-click the Income Statements folder.
9. Double-click IS_ABV_Fav; the completed report is displayed.
Demonstration: Variance Percentages
In addition to dollar variances, you can add a percentage variance column to the
favorable/unfavorable design.
1. Return to Report Designer and then click the Open Column
Definition icon.
2. In column E, select the CALC column type.
3. Type the formula "D/C".
4. Update the column width to 12.
5. Select the Percentage Format Override with negative numbers
presented in parenthesis ( ). Click OK.
6. Double-click column D, Header 1. Update the column header text to
read "Favorable/(Unfavorable)".
7. Select the Box format option and Spread the header from D to E.
Click OK.
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8. Click column D, Header 2 and press the Delete key. Type a
currency symbol "$". Click column E, Header 2 and type a percent
sign "%".
9. Save the changes to the column definition.
FIGURE 9.5 PERCENTAGE VARIANCE COLUMN
Re-generate a Report
Return to the report definition to generate the revised design.
1. Click the Open Report Definition icon.
2. Click Generate Report.
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3. Open the Income Statements folder to review the revised
IS_ABV_Fav design.
4. Close all open windows.
FIGURE 9.6 IS_ABV_FAV INCOME STATEMENT
Design Review
The sample building block definitions included with Management Reporter
contain a variance column definition that displays budget and prior year
variances, in addition to a dynamic actual or budget full year trend. Students can
return to the Demo Reports building block group to review the sample designs.
NOTE: Users can also export the sample designs and then import them into their own
building block group to use the sample designs as templates. Refer to the "Review Plus"
lesson of this training for more information about how to export and import.
Current and YTD Variances
Review the current and YTD actual versus budget and last year column definition
in the following steps.
1. On the Company menu, click the Companies menu item.
2. Click the Modify button.
3. Click the Building block group drop-down arrow and select Demo
Reports.
4. Click OK.
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11. Chapter 9: Variance Reporting
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5. Click Close.
6. Click the Column Definitions button in the navigation pane.
7. Double-click CY_Act_Bud_LYr to open the variance design.
The design includes the following concepts:
• Current and year-to-date columns for actual, budget, and last year
actual results
• Budget variance for both current and year-to-date in the
favorable/(unfavorable) design
• Last year variance for both current and year-to-date in the
favorable/(unfavorable) design
FIGURE 9.7 CY_ACT_BUD_LYR COLUMN DEFINITION
Dynamic Actual or Budget Columns
Another column design included with the sample reports displays a twelve month
trend of actual or budget columns. The report dynamically displays actual results
up to the reporting month, and then budget columns are shown for the rest of the
year. Based on the report date, the Conditional Print options control whether
actual or budget results are shown.
1. Verify that the column definitions are active in the navigation pane
and open Dynamic_GL.
2. Click the Print Control to review the Conditional Print options.
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Two design concepts are stressed in this column definition: the conditional print
control and the range formula.
• Conditional Print options compare P, the Period as defined in the
column definition, to B, the Base period as defined in the report
definition. When the condition is true, the column prints. If the
condition is false, the column is nonprinting. In the design, actual
columns print when the period is less than or equal to the report date,
while budget columns only print if the period is greater than the
report date.
• Columns that are nonprinting, either because of a Conditional Print
option or the NP print control, are ignored in column calculations
that contain a range. For example, column Z of the design displays
the formula B:Y. Only columns that print are included in the Full
Year Forecast column.
FIGURE 9.8 DYNAMIC_GL COLUMN DEFINITION
Reset the Training Building Blocks
The Fabrikam, Inc. company is reset to the "Training" building block group.
1. On the File menu, click Close All.
2. On the Company menu, click the Companies menu item.
3. Click the Modify button.
4. Click the Building block group drop-down arrow and select
Training.
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13. Chapter 9: Variance Reporting
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5. Click OK.
6. Click Close.
FIGURE 9.9 FW COMPANY
Summary
Variance reports are designed when users want to display the difference between
two columns of results. The two methods of designing variance reports are:
over/(under) and favorable/(unfavorable). When using the
favorable/(unfavorable) method, the print control XCR is applied to the variance
column in addition to the calculation formula. XCR works in combination with
the C normal balance code in the row definition to present the correct sign on the
variance. Variances can be presented in dollar or percentage formats.
Students benefit from this part of training by learning the subtle design
differences in the two variance reporting formats.
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Test Your Knowledge
Test your knowledge with the following questions.
1. Which of the following are true statements about XCR? (Select all that
apply)
( ) XCR is required on all variance columns
( ) XCR looks for C in the normal balance of the row definition
( ) XCR is typically used in favorable/(unfavorable) variance reports
( ) XCR is defined in both the row and column definition
2. Actual sales (A) are 650 and budget sales (B) are 575. What is the correct
column design for favorable/(unfavorable) variance reporting when budget is
used as the comparative basis?
( ) B-A with XCR
( ) A-B with XCR
( ) B-A
( ) A-B
3. Which of the following are true statements about Conditional Print options in
the column definition? (Select all that apply)
( ) A single column can return actual or budget results based on the print
control
( ) P=B is a Print Control option that only prints the column if the period
(P) is the same as the base period (B) in the report definition
( ) P>=B is a Print Control option that prints any column with a period
(P) that is greater than or the same as the base period (B) in the
report definition
( ) P<B is a Print Control option that prints any column with a period (P)
that is less than or the same as the base period (B) in the report
definition
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Quick Interaction: Lessons Learned
Take a moment and write down three key points you have learned from this
chapter
1.
2.
3.
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Solutions
Test Your Knowledge
1. Which of the following are true statements about XCR? (Select all that
apply)
( ) XCR is required on all variance columns
(√) XCR looks for C in the normal balance of the row definition
(√) XCR is typically used in favorable/(unfavorable) variance reports
( ) XCR is defined in both the row and column definition
2. Actual sales (A) are 650 and budget sales (B) are 575. What is the correct
column design for favorable/(unfavorable) variance reporting when budget is
used as the comparative basis?
(•) B-A with XCR
( ) A-B with XCR
( ) B-A
( ) A-B
3. Which of the following are true statements about Conditional Print options in
the column definition? (Select all that apply)
( ) A single column can return actual or budget results based on the print
control
(√) P=B is a Print Control option that only prints the column if the period
(P) is the same as the base period (B) in the report definition
(√) P>=B is a Print Control option that prints any column with a period
(P) that is greater than or the same as the base period (B) in the
report definition
( ) P<B is a Print Control option that prints any column with a period (P)
that is less than or the same as the base period (B) in the report
definition
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