Abnormal loss

This refers to proceeds or profits which are below the typical levels for a commercial transaction.

Abnormal losses typically occur when a competitor or customer takes advantage of a distortion in the market, for example a major customer demanding immediate discounts, knowing the supplier has stock which will shortly become obsolete. Typically, abnormal losses are short term as companies adjust to the new commercial reality, or go out of business. In process management abnormal loss occurs when fewer products are produced than expected from a given set of raw materials.

Abnormal loss is a term normally found in management accounting.

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