Why Losses Are Shown in the Assets Side of Balance Sheet?

In a business, losses are not the end of the road, but rather an opportunity to learn and improve. They are the result of an action or initiative taken in an effort to achieve success or risk taken in anticipation of creating something better or bigger. Losses are a record of what might not work in a situation or what should be avoided in the future and are a valuable tool for analysis.

In the modern technology-driven startup world, losses are stepping stones to building gigantic ideas of success in the future. Just like Thomas A. Edison, who suffered 1,200 attempts of failure before inventing the light bulb, businesses must be willing to take risks and learn from their mistakes in order to achieve success.

Similarly, in our personal lives, personal losses, adversities, challenges, setbacks and bottlenecks are all opportunities to create something new, to find an alternate way, and to come across something that was not previously tried. Napoleon Hill mentions in his 10th principle of success, in the Master Key that, with a positive mental attitude and an urge to learn more every time, we can turn every such incident into an asset. The bigger the incident, loss or damage, the bigger the opportunity to create something better. It is our determination to succeed, passion to realize our dreams and perseverance to get up every time we fall down that turns a loss into an asset, something we can benefit from and draw inspiration from throughout our lives.

Businesses are considered as going concerns of enterprise, mechanisms to earn profits and systems to earn positive cash flow year after year. A loss is temporary, a momentary lapse and a learning opportunity for the next phase of action in the journey to success. It’s important to remember that losses are not failures, but rather opportunities to improve and grow.