A variance report compares actual to expected results. The typical format is to first present the actual results, followed by the expected results (in the form of a budgeted or standard number), after which the variance amount and variance percentage are stated. This report allows management to gauge the performance of an organization against expectations. The report is most commonly used to calculate revenue and expense variances from a baseline forecast or budget.
The best variance reports highlight the most significant variances and downplay minor ones, so that management attention is directed towards material issues that are most in need of investigation and correction.