Definition of Breakage:

  1. Breakage has been an accounting issue for a long time. Some companies have been accused of inflating their revenue figures with breakage estimates. In 2006, it was estimated that consumers lost over $8 billion annually due to breakage.

  2. Fixed amount or percentage a supplier allows a customer to deduct from an invoice to compensate for goods broken during transit. For perishable goods, this amount is called spoilage.

  3. Premature repayment of a loan that attracts a penalty.

  4. The action of breaking something, or the fact of being broken.

  5. Breakage is a term used to describe revenue gained by retailers through unredeemed gift cards or other prepaid services that are never claimed. In these cases, the company pockets the money paid for these items, without actually providing the service or item for which the customer initially paid. Although nearly all of this money is considered to be a profit to the company, accounting uncertainty due to breakage has been a recurring problem throughout the years.

Synonyms of Breakage

Breaking, Breakage, Cracking, Cleavage, Rupture, Shattering, Fragmentation, Splintering, Splitting, Separation, Bursting, Disintegration, Abatement, Agio, Allowance, Bank discount, Bankruptcy, Breach, Break, Breakdown, Burst, Cash discount, Chain discount, Charge-off, Chip, Cleft, Collapse, Concession, Crack, Crack-up, Crippling, Cut, Damage, Deduction, Depreciation, Destruction, Detriment, Dilapidation, Disablement, Discount, Disrepair, Drawback, Encroachment, Fissure, Fracture, Gap, Harm, Hobbling, Hurt, Hurting, Impairment, Incapacitation, Infringement, Injury, Inroad, Kickback, Loss, Maiming, Mayhem, Mischief, Mutilation, Penalty, Penalty clause, Percentage, Premium, Price reduction, Price-cut, Rebate, Rebatement, Reduction, Refund, Rent, Rift, Rip, Rollback, Ruination, Ruinousness, Rupture, Sabotage, Salvage, Scale, Scathe, Setoff, Sickening, Slash, Slice, Slit, Splinter, Split, Spoiling, Tare, Tear, Time discount, Trade discount, Tret, Underselling, Weakening, Write-off

How to use Breakage in a sentence?

  1. The Financial Accounting Standards Board (FASB) devised a new model for accounting for prepaid services and goods that addresses the breakage that goes along with selling these items.
  2. The FASB released an Accounting Standards Update in 2016, which required companies to comply with new guidelines before December 15, 2019.
  3. The term "breakage" describes the revenue that retailers gain from un-redeemed gift cards or other prepaid services.
  4. In these cases, the company pockets the money paid for these items, without actually providing the service or item for which the customer or client initially paid.
  5. Some breakage of bone has occurred.

Meaning of Breakage & Breakage Definition