loss

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Loss

The opposite of gain.

Loss

Extracting less money from a transaction than one put into it. For example, a business' expenses may be $1 million for a year but it may only take in $800,000 in revenue. In such a case, the business has suffered a $200,000 loss. This is not always bad; most businesses lose money in the first few years of operation and this can reduce their tax liability when they do make a profit. However, losses over an extended period of time ultimately result in failure. See also: Gain, Paper Loss, Loss Carryforward, Loss Carryback.

loss

The deficiency of the amount received as opposed to the amount invested in a transaction. Compare gain. See also net loss.

loss

the shortfall between a firm's sales revenues received from the sale of its products and the total costs incurred in producing the firm's output (see BREAK-EVEN ANALYSIS). Losses may be of a temporary nature occasioned by, for example, a downturn in demand (see BUSINESS CYCLE) or due to an exceptional level of expenditures (such as the launch of a series of new products). Short-term losses are usually financed by a firm running down its RESERVES or by an increase in borrowings. Losses which are sustained over time typically arise from a firm's poor competitive position in a market (see COMPETITIVE ADVANTAGE), and unless competitiveness can be restored market exit or DIVESTMENT may be the only practical way of remedying the situation. See MARKET SYSTEM.

loss

the difference that arises when a firm's TOTAL REVENUES are less than TOTAL COSTS. In the SHORT RUN, where firms’ total revenues are insufficient to cover VARIABLE COSTS, then they will exit from the market unless they perceive this situation as being temporary. In these circumstances, where firms’ total revenues are sufficient to cover variable costs and make some CONTRIBUTION towards FIXED COSTS, then they will continue to produce despite overall losses. In the LONG RUN, however, unless firms’ revenues are sufficient to cover both variable and fixed costs, then their overall losses will cause them to exit from the market. See MARKET EXIT, LOSS MINIMIZATION, PROFIT-AND-LOSS ACCOUNT.
References in periodicals archive ?
To realize the full benefit of these amendments, we believe that the three-year carryback should be equally available for losses incurred after the announcement of the amendments.
Exhibit 3, page 98, illustrates the importance of the DI's location on the loss curve, In periods of increasing losses, the historical average loss rate typically is an insufficient estimate of losses incurred in the current period.
final contract price for each delayed day and compensate for the losses incurred by the contracting authority.
Kanpur, January 31 (ANI): Many small time investors are faced with uncertainty as they try and cope with the losses incurred by them in the stock market due to financial fraud in IT service provider the Satyam.
Analysts believe that banks are hiking interest rates of credit card customers in order to offset losses incurred in their banking operations.
In four of the past six months, the excess spread has not been sufficient to cover the monthly losses incurred.
The businesses can probably continue to operate autonomously through the use of a single-member limited liability company Further, any ongoing losses incurred by the historical S corporation can serve to reduce taxes on C profits.
165(c)(1) governs losses incurred in a trade or business.
Every month for the past 12 months, the excess spread has not been sufficient to cover the monthly losses incurred.
The DCL rules generally limit the use of losses incurred by a "dual resident corporation" (DRC) to offset the income of affiliated domestic corporations.
These forward-looking statements include our 2006 guidance with respect to US Mortgage Insurance Operations' losses incurred and expense ratio, and our consolidated investment portfolio yield, stock based compensation expenses and tax rate.
150213(1) (3) provides a one-time election to apply the new regulations to all intercompany stock gains and losses incurred in pre-July 12,1995 tax years, if the triggering event occurs on or after that date and is a stock elimination transaction (i.