What does variance from prior year measure in a budget report?

• A. Difference between the latest forecast and last quarter.
• B. Difference between current year's results and prior year's results.
• C. Difference between the club's revenue and expenses.
• D. Difference between current year's budget and this month's actuals.

Answer: (B)

Variance from prior year is about measuring how much the current year's results differ from the previous year's for the same period. It shows year-over-year growth or decline and helps you see real trends, not just how you performed against a plan. To find it, you compare the current year's totals (revenue, expenses, or overall results) with the corresponding totals from the prior year and take the difference or the percentage change. This focuses on changes over time, keeping the period consistent so you’re comparing apples to apples.

This is different from a forecast-to-last-quarter comparison, which gauges forecasting accuracy over a short window; it’s different from the basic revenue minus expenses (net income) figure, which is a single outcome rather than a comparison across years; and it’s different from budget-to-actual for the current year, which looks at how you performed against the budget rather than against the prior year's actuals.