In accounting, parentheses around a number typically indicate a loss, while a figure without parentheses represents a profit. This is a common practice used in financial statements and reports to quickly communicate the status of income and expenses.
For example, if you see a revenue figure of $5,000, it suggests that the company has made a profit. Conversely, if you see $(3,000), it signals a loss of that amount. This convention helps stakeholders, including investors and management, easily identify financial health at a glance.
Using parentheses for losses is particularly helpful in summarizing financial data, as it allows for easier comparisons. When reviewing overall financial performance, seeing a series of numbers with and without parentheses can immediately show where a company has lost money versus where it has gained.
In summary, if you encounter parentheses in accounting figures, interpret them carefully as indicators of loss, adding clarity to financial reporting.