Abnormal Loss

A loss which is avoidable through precautionary measures is called abnormal loss. For example: Loss by fire, accident.

The loss realized over the normal loss is termed an abnormal loss. Abnormal loss arises because of abnormal working conditions, unhealthy working condition, carelessness, rough handling, lack of correct data, low quality material, machine breakdown, accident etc. thus an abnormal loss is unanticipated unanticipated loss. Abnormal loss could be a controllable loss and thus is avoided if corrective measures ar taken. Therefore, abnormal loss is also called an avoidable loss.
The value of an abnormal loss is assessed on the premise of the production cost with which the profit and loss account is charged.