pro formapro for·ma
Origin of pro formaClassical Latin
- Done as a formality; perfunctory.
- Provided in advance so as to prescribe form or describe items: a pro forma copy of a document.
Origin of pro formaNew Latin pr&omacron; f&omacron;rma : pr&omacron;, for the sake of + f&omacron;rma, ablative of f&omacron;rma, form.
- For the sake of form only.
From Latin, see Latin etymology.
pro forma - Investment & Finance Definition
Earnings that have been adjusted by the company to exclude expenses that are not representative of the company’s true business. During the height of the Internet boom during the late 1990s, many companies excluded the cost of employees’ stock options. Other items that often are excluded from companies regular earnings are charges for extraordinary items, charges for discontinued operations, and one-time charges. Pro-forma earnings are in contrast to GAAP earnings, which follow set rules developed by accountants. Also called normalized earnings. See also GAAP.
pro forma - Legal Definition
- For form.
- Done as a formality, rather than because of conviction, in order to make possible further proceedings.
- In accounting procedures, done in advance to provide a what-if statement, predict results, or to convince. For example, a balance sheet showing combined figures of two companies in case of a merger.