Loss assets
A loss asset is one where loss has been identified by:
(a) the bank; or
(b) the internal or external auditors; or
(c) the RBI inspection.
but the amount has not been written off wholly. In other words, such an asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted although there may be some salvage or recovery value.
It may be noted that the above classification is meant for the purpose of computing the amount of provision to be made in respect of advances. The balance sheet presentation of advances is governed by the Third Schedule to the Banking Regulation Act, 1949, which requires classification/presentation of advances altogether differently.