NOL Meaning and
Definition
-
NOL stands for "Net Operating Loss." It is a term commonly used in finance, accounting, and taxation to describe a company's financial situation when its tax deductible expenses exceed its taxable income. NOL represents the difference between a company's allowable deductions and its taxable income. In other words, it is the amount by which a company's tax deductions exceed its taxable income, resulting in a negative net income for tax purposes.
When a company experiences a net operating loss, it indicates that its business operations have generated losses or incurred expenses that outweigh its revenue. These losses can occur due to various factors such as depreciation of assets, interest payments, business expenses, and operating costs. NOLs can be used to offset a company's taxable income in future periods, providing tax relief to the company.
In the United States, companies with NOLs can carry the losses forward or backward to offset taxable income and potentially reduce their tax liability. Carryforward allows companies to deduct NOLs from future taxable income, while carryback allows companies to apply NOLs to reduce taxable income in previous years. This enables companies to recover from downturns or temporary financial setbacks by reducing their overall tax burden.
Overall, NOL is a financial term that refers to a company's net operating loss, indicating that its tax deductions exceed its taxable income. It represents a temporary negative financial position, which can provide tax benefits in future or previous tax years.
Common Misspellings for NOL
- njol
- n0ol
- no0l
- n9ol
- n ol
- no l
Infographic
Add the infographic to your website:
