What is a real loss?

The actual loss is the total amount of net loss that the individual or business experience after all the factors that have to do with the transaction. Rather than being a projection or estimate of the loss, the actual total loss of specific criteria is calculated and must include the loss of actual cash, not just the losses published on paper, but have not yet been realized. This means that while the investor can lose money on shares shares, if the unit price of these shares decreases, there will be no real loss until these shares are actually sold and the investor fails to recall his original investment in these shares.

One of the simplest ways to understand what is a complete loss is to consider a family vehicle that is stolen and eventually undressed thieves and sold as scrap. In this scenario, there is no opportunity to repair the vehicle and feasible again, so the loss for the owner is completed. There is a different difference of the opinion of whether the amount is actuallosses of the current market value of the vehicle or the original purchase price. In both cases, the fact that the asset is destroyed and nothing can be saved from the situation means that the owner is experiencing a real loss.

In terms of real permanent loss, identification of the amount of this loss usually involves taking into account factors, such as shifts in the economy that may have a certain impact on value, either during the recession or the period of inflation. Any small income that could be generated from the asset would also be used to balance the total amount of actual loss. Using an example of a stolen car if the vehicle was restored, but it was found that the repair of the vehicle would take more than it would be worth what was left of the vehicle can be sold for scrap and the proceeds of this sale would be deducted by the real market value of the car before stolen.

The basic purpose of calculating actual loss is the exactFind out what type of loss, if exists, is maintained when selling asset. Companies usually calculate this type of loss when selling real estate or other types of assets within the closure of the company or as a means to reduce the size of business in an effort to remain in operation. Similarly, individuals may try to determine the actual loss arising from the sale of houses if the current market value has decreased under the current balances owed on mortgages associated with these real estate.