When do you put parentheses around a number?
In accounting or finance, parentheses are commonly used to indicate negative numbers or values. It represents a decrease in performance, position or values.
Financial statements are generally organized in a way that uses positive numbers to represent gains such as income or assets, and negative numbers to represent losses, that is expenses or liabilities.
For example, if a company reports a net loss of $5,000 for the year, it may be represented as ($5,000) on the financial statement to indicate that it is a negative value. Similarly, if a company reports a decrease in the value of its assets, it may be represented in parentheses to indicate a negative change.
The use of parentheses in accounting and finance is important because it helps to differentiate between positive and negative values. It makes it easier for financial analysts and investors to interpret and compare financial information. It also helps to ensure accuracy and consistency in financial reporting across different companies and industries.