Credit Related Losses

Definition - What does Credit Related Losses mean?

A credit related loss is a financial loss that a company endures due to giving credit to other companies or individuals and not receiving the money that the lending company is owed back. Most companies who lend money to other companies or individuals expect a certain amount of credit related loss per year.

Justipedia explains Credit Related Losses

As explained, nearly all companies that deal with lending anticipate credit related losses throughout the year. In fact, companies usually spend a lot of money to try and statistically determine how much credit related loss the company will experience in any given year so the company can plan accordingly. Additionally, sometimes companies can receive certain tax deductions based on credit related losses. That is never as good of an exchange as it would be to have been paid the money that the company was originally owed.

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