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## What is variance?

A number of tools and reports in Fathom calculate and show a variance between two values. This could be comparing a KPI result against its target or budget or simply comparing the value for an account against the corresponding value in a prior period.

An example of variance values can be found in the KPI Results analysis tool: ## Variance Calculation Method

Each KPI or Account in Fathom has an associated 'Unit of Measure'. The unit of measure impacts our variance calculation.

For an account the unit of measure is always 'Currency' meaning the values will display with the currency symbol based on the company settings.

A KPI can have a unit of measure that ranges from percentage, currency, times, days, ratio or even a custom value.

Variance for currency

The variance for currency amounts is calculated as:

variance = (current value - prior value) / prior value

The result is presented as a percentage change. There are a few caveats though where we switch to the 'difference' method described below for percentages.

• If the result or comparison result (e.g. prior period value, target, or budget) is equal to or less than zero.

• If the two values do not have the same sign.

### Variance for percentages and other units of measure (times, days, :1, custom)

If the unit of measure is not currency then variance is calculated as the difference between the two values.

variance = current value - prior value

eg. If January has 10% and February has 25% the variance will be calculated as 15%.

We do not calculate a percentage variance between percentage values.