Examples of expenses often excluded from pro forma results are company restructuring costs, a decline in the value of the company's investments, or other accounting charges, such as adjusting the current balance sheet to fix faulty accounting practices in previous years.
The pro forma models the anticipated results of the transaction, with particular emphasis on the projected cash flows, net revenues and taxes.
Similarly, when a new corporation is envisioned, its founders will prepare pro forma financial statements for the information of prospective investors.
Also, banks will request pro forma statements in lieu of tax returns for a start up business in order to verify cash flow before issuing a loan or line of credit.
In trade transactions, a pro forma invoice is a document that states a commitment from the seller to sell goods to the buyer at specified prices and terms.
In law, pro forma court rulings are intended merely to facilitate the legal process (indeed to move matters along).
In certain Commonwealth nations with a Westminster system, such as the United Kingdom, Canada, and Australia, pro forma bills are introduced immediately before consideration of the speech from the throne.
This practice does not extend to the Australian Senate; instead other formal business is conducted (such as question time and procedural motions) before consideration of the governor-general's speech.
[12] However, in 2014 the Supreme Court of the United States in NLRB v. Noel Canning determined that the President had improperly used his presidential power to make these appointments, stating that while the Senate was in recess punctuated by pro forma sessions the period of time between the sessions was not long enough to invoke such power.
[13] In April 2020, President Donald Trump claimed that the president's constitutional power under Article II, Section 3 empowered him to suspend both houses of Congress (overriding the pro forma procedure), thus enabling him to make appointments to vacant government positions while Congress is suspended.
[17] The suggestion was condemned by former Clinton Press Secretary Joe Lockhart and quickly shot down by the Republican Senate leader Mitch McConnell.