Differences Between Capital Loss And Revenue Loss

Followings are the main differences between capital loss and revenue loss

Causes

Capital loss occurs due to the sale of assets, share and debentures at a price less than their face value or book value. Revenue loss occurs due to heavy amount of operating expenses and low turnover or sales.

Nature

Capital loss does not occur in the normal course of the business. Revenue loss occurs in the normal course of the business.

Indication

Capital loss does not indicate the inefficiency of the business. Revenue loss indicates the inefficiency of the business.

Treatment

Capital loss is shown on the asset side of the balance sheet. Revenue loss is shown on the debit side of the trading and profit and loss accounts and asset side of the balance sheet as accumulated loss.