When designing a three dimensional part sheet metal part, it is important to take into account the bend allowance (also known as bend deduction). When bending a sheet metal part in a brake press, the region of the sheet close to and in touch with the punch and die stretches and compresses. Thus, if you compare the sheet length after bending with the initial flat length you will find that they are different. If you don't compensate for this variation, the final product will not have accurate dimensions. Typically you subtract material length from the flat part so that it stretches to the final dimension.

This becomes critical when you need to maintain tight tolerances on sheet metal that has many bends.  Bend allowance depends on how the final sheet dimensions are measured and on several important variables, such as the material properties, sheet thickness, and bend radius.

CAD software often use a K-factor, the percentage of metal thickess that is used to determine the neutal bend arc radius.

Probably as good an explanation that you will ever get is found here.

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