Losses - what is it?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Losses - what is it? What are they? When do they occur? How can they be combated, minimized and eliminated?

General information

Let's start with a definition. Losses are losses expressed in monetary terms, which entailed an increase in expenses and their excess over income (or a decrease in the company's profit with the same result). They arise during production and / or sales, when the level of costs exceeds the selling price of manufactured products, works, services, etc. due to various reasons.

These can be fines, pen alties, forfeits, writing off bad debts, uncompensated losses from natural disasters, from the loss of material values above the natural norm, when the perpetrators, arbitration fees, court costs and other things are not identified. At the end of the year, the results are summed up and it is determined what is available for the dry balance - profits or losses. This allows us to draw conclusions about the correctness of the adopted work strategy and decide on future plans.

What is a legal loss?

The loss of an enterprise is a well-defined aspect of various laws and regulations. The most attention to himgiven in the Civil Code of the Russian Federation. Of greatest interest in this case is Article 15, 330 and 331 of the Civil Code of the Russian Federation. What does it say? The most general and complete loss is considered in article 15. It gives its definition and various variations.

So, considering the legislation, one can note both a conscious offense with incurring costs, and non-receipt of income, and lost profits, and opportunities to claim compensation. Article 330 of the Civil Code of the Russian Federation is given to the pen alty. And the loss of a deposit is already Art. 331 of the Civil Code of the Russian Federation. It should be noted that this is not a complete list of articles where damages are mentioned. But all other cases - as a rule, in the event of rather specific situations.

What about compensation?

In the legislation for such cases, the phrase "compensation for damages" is used. This means that losses can be compensated in cases where it is provided for by the Civil Code, regulatory documents and the contract (if it does not contradict the first two). Therefore, we can count on the fact that at least something will come back. But you need to understand that this is only for certain cases.

Let's consider small examples. There is an entrepreneur. He has produced a certain amount of products, but if he cannot sell it, then he will have significant losses. This, of course, is bad, but no one will compensate them. And let's say people bought insurance for a house against landslides. There was a natural disaster and the house was destroyed. Well, in suchIn this case, the insurance company guarantees compensation for losses. This will allow you to buy or build yourself a new home and provide it with all the necessary equipment.

What is it called?

Let's continue with the previous two examples. When an entrepreneur cannot sell his products, he has an uncovered loss. It does not offer compensation for knowing what he was getting into and for taking risks that could lead to failure. Due to the impossibility of predicting success, the enterprise may fail, and the dependence of the final result on a large number of different factors leads to the fact that no compensation can be provided. Indeed, in this case, a wide field for abuse opens up.

While in the case of real estate, you can estimate the chances that it will suffer in the near future. So, for example, in a certain area, every twentieth house is destroyed by landslides in a decade. In this case, you can take and offer insurance coverage worth 1/10 of the price of the house. Of course, this is a very rough example, but now it is clear how this mechanism works.

Economic aspect

When do losses occur? The prerequisites for them are a number of factors, describing which you can write more than one book. But since the size of the article is limited, we will consider the most common causes.

Initially, it should be mentioned that many entrepreneurs produce products that are not in demand whenexisting value for money. It may also be that it is not required at all. Therefore, before embarking on a specific project, you should still take care to analyze the potential market and develop at least an approximate plan of activity.

After that, in the list of the most popular reasons are deliberate offenses of sabotage content committed by third parties. As such, employees of the enterprise (accidentally or intentionally), competitors or responsible persons (controllers, civil servants and other people) can act. True, in this case, you can still count on some compensation. But getting it comes at a significant cost.

Conclusion

Profit, loss - these are natural moments of doing business. In order not to be mistaken in the assessment of the existing situation, it is necessary to keep detailed accounting records. Accurate knowledge of the situation at the enterprise will allow you to make the necessary decisions. So, if too many products have accumulated in the warehouse, then part of the capacity can be stopped. If orders do not have time to be fulfilled, you should think about optimization and expansion.