Prorating: meaning, definitions and examples
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prorating
[ ˈprɔːreɪtɪŋ ]
financial calculation
Prorating refers to the process of allocating or distributing a cost or amount proportionally based on a specific period of time or usage. It is commonly used in finance to divide expenses or earnings among different parties or periods, ensuring that each party pays only for what they have consumed or are entitled to receive.
Synonyms
Examples of usage
- The rent for the apartment was prorated for the days not lived.
- They prorated the utility bill based on each tenant's usage.
- When the project ended early, costs were prorated among the stakeholders.
- The salary was prorated due to an employee's part-time status.
Translations
Translations of the word "prorating" in other languages:
🇵🇹 prorrateio
🇮🇳 प्रारंभिक आवंटन
🇩🇪 Prorierung
🇮🇩 pembagian proporsional
🇺🇦 пропорційне розподілення
🇵🇱 prorata
🇯🇵 按分
🇫🇷 prorata
🇪🇸 prorrateo
🇹🇷 paylaştırma
🇰🇷 비례 배분
🇸🇦 تقسيم نسبي
🇨🇿 prorata
🇸🇰 prorata
🇨🇳 按比例分配
🇸🇮 prorata
🇮🇸 prófa
🇰🇿 пропорционалды бөлу
🇬🇪 პრორატა
🇦🇿 prorata
🇲🇽 prorrateo
Etymology
The term 'prorating' derives from the Latin word 'pro rata,' which means 'in proportion.' This phrase translates to the English usage where it indicates the proportional allocation of costs or benefits. The concept itself has been utilized in financial transactions and accounting since the development of modern economic systems, where fair distribution of resources or costs became essential. In the 19th century, the term began to gain more prevalence in financial circles as businesses and individuals sought equitable methods for calculating shared expenses, especially in scenarios involving multiple parties or overlapping time frames. Over time, prorating became a standard practice across various fields such as insurance, rent agreements, and salaries, emphasizing its importance in ensuring fairness and clarity in financial dealings.