http://www.norwalk-cpa.com/what-is-the-difference-between-zero-accounting-profit-and-zero-economic-profit/ A Norwalk, CA Accounting Groups Tue, 28 Dec 2010 19:19:08 +0000 hourly 1 http://wordpress.org/?v= http://www.norwalk-cpa.com/what-is-the-difference-between-zero-accounting-profit-and-zero-economic-profit/comment-page-1/#comment-339 bjmunche Wed, 21 Oct 2009 13:49:48 +0000 http://www.norwalk-cpa.com/what-is-the-difference-between-zero-accounting-profit-and-zero-economic-profit/#comment-339 I'll put it in simple terms... Zero Accounting Profit--means there is no dollar/monetary amount or value producing a profit. $0.00 Zero Economic Profit--means there are no benefits to reap or prosper from (for instance if you had reached a $50 monetary / accounting profit you would receive 10 free books for each dollar...the free books were an Economic profit, or say a free lunch for every employee for breaking even (that would be an economic profit). Economic profit are benefits that you can gain an incentive like profit from. I’ll put it in simple terms…
Zero Accounting Profit–means there is no dollar/monetary amount or value producing a profit. $0.00
Zero Economic Profit–means there are no benefits to reap or prosper from
(for instance if you had reached a $50 monetary / accounting profit you would receive 10 free books for each dollar…the free books were an Economic profit, or say a free lunch for every employee for breaking even (that would be an economic profit). Economic profit are benefits that you can gain an incentive like profit from.

]]> http://www.norwalk-cpa.com/what-is-the-difference-between-zero-accounting-profit-and-zero-economic-profit/comment-page-1/#comment-341 Vaughn N Wed, 21 Oct 2009 13:47:28 +0000 http://www.norwalk-cpa.com/what-is-the-difference-between-zero-accounting-profit-and-zero-economic-profit/#comment-341 Accounting profit includes "paper" expenses such as depreciation and amortization where as ecomonic income does not. Hope this helps. Accounting profit includes “paper” expenses such as depreciation and amortization where as ecomonic income does not.
Hope this helps.

]]> http://www.norwalk-cpa.com/what-is-the-difference-between-zero-accounting-profit-and-zero-economic-profit/comment-page-1/#comment-340 J-Luv The Bunny Wed, 21 Oct 2009 13:26:37 +0000 http://www.norwalk-cpa.com/what-is-the-difference-between-zero-accounting-profit-and-zero-economic-profit/#comment-340 Zero accounting profit means total revenue - total explicit costs = $0. Explicit costs are costs that you can account for with documents, not abstract figures without any justification. Zero economic profit means total revenue - total explicit costs - total implicit costs = $0 Implicit costs are costs such as "I should have worked for someone instead of running a business", very subjective and without good justification. It usually represents an owner's personal resources when it comes to running a business (e.g. owner's labour cost). Zero accounting profit means total revenue – total explicit costs = $0.
Explicit costs are costs that you can account for with documents, not abstract figures without any justification.
Zero economic profit means total revenue – total explicit costs – total implicit costs = $0
Implicit costs are costs such as “I should have worked for someone instead of running a business”, very subjective and without good justification. It usually represents an owner’s personal resources when it comes to running a business (e.g. owner’s labour cost).

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