Normal loss

In financial management, this refers to the revenue for a product of service being lower than its cost, where normal market conditions are applying.

In process management, normal loss refers to the amount of products which are lost during processing due to expected circumstances, for example 5% of potatoes picked may be expected to be unfit for retail. In accounting terms normal loss has no monetary value, unless sold for scrap.

Normal loss is a term normally found in management accounting.

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