Discounts lost definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Discounts lost can be defined as: Expenses resulting from not taking advantage of cash discount on purchases. Discounts lost represents a loss from not taking a discount, usually a cash discount. A cash discount is generally given for payment within a shorter period of time then the regular payment terms. If a company assumes they will take the discount by paying within the shorter time frame they could report the receivable and related accounts payable net of the discount. If they then pay after the discounted period, they would lose the discount and would need to account for the loss of discount at that the point of payment.
