Dictionary of Accounting Terms: standard of comparison
standard of comparison
standard used in relating a base or typical item to a current one. For example, budgeted sales may be compared to actual sales, with deviations noted. Corrective action can then be taken. Also, the trend in a financial statement item may be examined for a percentage change. If sales last year were $100,000 and this year are $150,000, the percentage increase is 50%. A comparison can also be made of a company's financial statement figures to those of other companies in the industry as well as to industry norms.
