Notionally describes something that exists or is considered to exist in theory or as an idea, rather than in reality. It often implies a hypothetical or conceptual aspect, something that is imagined, assumed, or taken as a given for the purpose of discussion or calculation, even if it doesn't have concrete practical application. The term highlights a separation between the abstract idea and its tangible manifestation, emphasizing a reliance on concepts or models rather than observable facts. This can apply to finances, legal frameworks, or even the understanding of complex situations. It suggests a degree of artificiality or simplification for the sake of clarity or argumentation.
Notionally meaning with examples
- The company's value was notionally estimated at $1 billion during the pre-IPO phase, based on projected future earnings. However, the actual market valuation upon listing proved significantly lower, reflecting a more cautious investor sentiment than was initially assumed. This highlights how a notional figure can serve a purpose in planning but may not reflect real-world conditions.
- The agreement stipulated a 'notional' transfer of assets to the new subsidiary. This meant, in practice, that there was no physical movement of property, only a legal realignment on paper. The purpose of the 'notional' transfer was to facilitate tax optimization, without any immediate practical changes in the company's operations or structure.
- To understand the impact of climate change, scientists might model the 'notional' increase in global average temperature under different emissions scenarios. These models, while simplified representations of reality, are useful in projecting potential future consequences and developing mitigation strategies, even if the actual events are uncertain.
- The central bank set a 'notional' interest rate on its overnight lending facility to influence borrowing costs in the economy. Although the rate itself isn't directly paid by private institutions, it serves as a benchmark, guiding the actual interest rates charged by other banks, hence influencing real world lending behavior.