Business Glossary

excess of operating expenses over operating revenues. It excludes income statement items that do not relate to normal business activities, such as extraordinary gains or losses. It also excludes financial expenses and revenue (i.e., interest expense, dividend income).

tax term for the excess of business expenses over income in a tax year. Under tax loss carryback, carryforward provisions, NOLs can (if desired) be carried back two years and forward 20 years. The carryback period for net operating losses caused by casualty and theft losses is three years.

excess of allowable deductions over gross income with certain specific adjustments set forth in the Internal Revenue Code, which are generally designed to limit the net operating loss deductions of individual taxpayers to business losses. Corporations that incur a net operating loss pay no tax in the current year and can claim a refund for 2 prior years' taxes paid, then carry over the NOL to as many as 20 future years.