Pro rata

With the Latin phrase pro rata temporis (Latin: about, pro rata ' ), particularly in law and economics, the distribution of a sum of money meant to time periods corresponding to the duration of the time periods.

Pro rata means also on the ratio; on investments, this may mean that in unequal proportions the transactions undertaken are distributed in proportion to the share. For purchase transactions, this means that the payment in proportion allocated to the goods carried.

Example

A machine with a purchase price of € 48,000 is being amortized over an estimated useful life of 4 years. On each full year of their use accounts for € 12,000 of the purchase price. If the purchase of the machine in an ongoing business year - it is, for example, acquired on March 1, -, then the amortization in the first fiscal year pro rata amount to 10,000 €, namely ten- twelfth of the annual amount for ten out of twelve months.

• Accounting Law
• Tax law
• Latin phrase