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An instantaneous power balance analysis of time-domain finite-element method for transient 2-dimensional (2-D) magnetic field and electric circuit coupled computation is presented. Based on the principle of instantaneous power balance and the technique of matrix analysis, formulations for the computation of instantaneous reactive power, active power and eddy-current loss in solid conductors are put forward. The merit of the proposed algorithm is that the integration method for the loss computation is exactly the same as that for the system equations. Therefore, additional numerical errors arising from the integration in loss computation can be avoided. It clarifies the methods for eddy-current loss computation in solid conductors. The precise identification of instantaneous real power and reactive power is expected to pave the way for a new and accurate approach to extract the instantaneous ac resistances and inductances of the equivalent electric circuit. The concept of instantaneous power balance can also be used for force and torque computations.