![]() ![]() In business, pro forma financial statements are prepared in advance of a planned transaction, such as a merger, an acquisition, a new capital investment, or a change in capital structure such as incurrence of new debt or issuance of stock. Securities and Exchange Commission requires publicly traded companies in the United States to report US GAAP-based financial results, and has cautioned companies that using pro forma results to obscure US GAAP results would be considered fraud if used to mislead investors.īusiness Financial statements įurther information: Financial modeling § Accounting There was a boom in the reporting of pro forma results in the US starting in the late 1990s, with many dot-com companies using the technique to recast their losses as profits, or at least to show smaller losses than the US GAAP accounting showed. Examples of expenses often excluded from pro forma results are company restructuring costs, a decline in the value of the company's investments, or other accounting charges, such as adjusting the current balance sheet to fix faulty accounting practices in previous years. The pro forma accounting is a statement of the company's financial activities while excluding "unusual and nonrecurring transactions" when stating how much money the company actually made. The term is used in legal and business fields to refer to various types of documents that are generated as a matter of course. The term pro forma ( Latin for "as a matter of form" or "for the sake of form") is most often used to describe a practice or document that is provided as a courtesy or satisfies minimum requirements, conforms to a norm or doctrine, tends to be performed perfunctorily or is considered a formality. JSTOR ( September 2008) ( Learn how and when to remove this template message).Unsourced material may be challenged and removed. Please help improve this article by adding citations to reliable sources in this article. By calling pro forma sessions, the majority party can prevent the minority party from introducing or voting on legislation, even if the majority party is not actually conducting any business of its own.This article needs additional citations for verification. ![]() Pro forma sessions can also be used as a way for the majority party to block legislation that is supported by the minority party. Said Reid: “I am keeping the Senate in pro forma to prevent recess appointments until we get this process on track.” It can also prevent a president from pocket-vetoing a piece of legislation.ĭuring a 2007 recess, for example, Senate Majority Leader, Harry Reid, planned to keep the Senate in pro forma session in order to prevent further controversial appointments made by the Bush Administration. For example, a pro forma session can be called to prevent the president from making recess appointments, as the Constitution requires the Senate to be in session in order to consider such appointments. While pro forma sessions serve a procedural purpose, they can also be used for other purposes. No votes are taken and no legislation is considered during a pro forma session. Pro forma sessions are typically led by the presiding officer of the chamber, and they typically consist of little more than a roll call and the reading of a brief statement. This requirement is set forth in the Constitution, and pro forma sessions are a way for Congress to meet the requirement without actually conducting any business. ![]() Pro forma sessions are most commonly used in the United States Congress, where they are typically called to meet the requirement that each chamber must meet at least once every three days. These sessions are often used to fulfill a procedural requirement or to demonstrate that the legislature is still in session, even if no actual work is being done. A pro forma session is a brief meeting of a legislative body, typically lasting only a few minutes, during which no formal business is conducted. ![]()
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