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What is the difference between expense and loss?

A cost used up in earning revenues in a company's main operations, they usually take the form of an outflow or depletion of assets such as cash & cash equivalents, inventory, or property, plant and equipment. Some examples of expenses include advertising expense, commission expense, rent expense, cost of goods sold, salaries expense, and so on. Expenses also include costs used up during the accounting period such as interest expense, insurance expense, and depreciation expense.

Those are other items that meet the definition of expenses, associated with a "peripheral" or "incidental" transaction. Examples of losses include the loss on the sale of an asset used in the business, loss from a lawsuit settlement, and loss from retirement of bonds. However, there are some losses that are closer to operations, such as the loss on write-down of inventory from cost to market.

When losses are recognized in the statement of comprehensive income, they are usually presented separately because knowledge of them is useful for making economic decisions.
What is the difference between expense and loss? Reviewed by Azreen Mohamed on Monday, November 24, 2014 Rating: 5

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