Surplus

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DEFINITION of 'Surplus'

The amount of an asset or resource that exceeds the portion that is utilized. A surplus is used to describe many excess assets including income, profits, capital and goods. A surplus often occurs in a budget, when expenses are less than the income taken in, or in inventory when fewer supplies are used than were retained.

INVESTOPEDIA EXPLAINS 'Surplus'

A surplus isn't always a positive outcome. In some cases, when a manufacturer anticipates a high demand for a product that it produces and makes more than it sells during that time period, it can have a surplus inventory which may, if it's deep enough, create a financial loss for that quarter or year. When the surplus is of a perishable commodity, such as grain, it could result in a permanent loss, or a write-down as the inventory becomes bad.

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