Lakh

In the Indian subcontinent, the term 'Lakh' (10^5 or 100,000) is commonly used in finance and other contexts to indicate sums of money or quantities. Often used alongside 'Crore' (10^7 or 10,000,000).
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Definition

Lakh is a unit in the South Asian numbering system which denotes one hundred thousand (100,000; 10^5). This unit is often employed in financial contexts to represent substantial sums of money. In this system, one crore is equivalent to ten million (10,000,000 or 10^7) and one hundred lakh make up one crore.

Example: Twenty lakh Indian rupees (INR 2,000,000) would be verbally expressed and often written as 20,00,000 INR.

Examples

  1. Real Estate: A house might be valued at 50 lakh INR, which translates to 5,000,000 INR.
  2. Salary: An executive’s annual salary might be 12 lakh INR, which corresponds to 1,200,000 INR.
  3. Budget: A school might have an annual budget of 10 lakh INR, meaning the budget is 1,000,000 INR.

Frequently Asked Questions (FAQs)

Q: How is the term ’lakh’ different from ‘million’? A: ‘Lakh’ is a part of the South Asian numbering system and stands for 100,000, whereas ‘million’ in the international system signifies 1,000,000.

Q: How do you write 4.5 million in terms of lakh? A: 4.5 million is equivalent to 45 lakh (4,500,000).

Q: How is ’lakh’ typically written using separators? A: In the South Asian system, separators are used to indicate the number of lakh rather than millions. For example, 45 lakh would be written as 45,00,000.

Q: What is the equivalent of one crore in terms of lakh? A: One crore is equivalent to 100 lakh (10,000,000).

Q: Can the term ’lakh’ be used in other contexts apart from finance? A: Yes, ’lakh’ can also be used to denote quantities in areas like population, inventory, etc.

  • Crore: A unit in the South Asian numbering system equal to ten million (10,000,000 or 10^7).
  • Million: A unit in the international numbering system equivalent to 1,000,000.
  • Indian Numbering System: A numerical system used in the Indian subcontinent which includes terms like ’lakh’, ‘crore’, and ‘ara’.

Online References

Suggested Books for Further Studies

  • “India Unbound: From Independence to the Global Information Age” by Gurcharan Das
  • “Accounting for Dummies” by John A. Tracy
  • “The Essentials of Finance and Accounting for Nonfinancial Managers” by Edward Fields

Accounting Basics: “Lakh” Fundamentals Quiz

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