An app note from Alpha & Omega Semiconductors about proper way of evaluating MOSFET’s power handling capability based on how much loss it will generate based on the application conditions. Link here (PDF)
System designers are often faced with the task of selecting the most suitable power device from a wide array of products from different manufacturers with very similar ratings. While a detailed parameter by parameter comparison is technically the most correct way of selection, it is not the most practical and designers resort to making their first cut based on 3-4 simple parameters. Among these are package, voltage and current ratings, Rdson etc. In this article we will take a close and practical look at the current rating. For purposes of illustration we will focus on Mosfets in low and medium power packages, but the considerations can be applied to other technologies as well.