Write-Off

What is Write-Off?

A write off is an accounting action that reduces the value of an asset while simultaneously recording an expense. This typically occurs when an asset is deemed to be no longer useful or when a debt is determined to be uncollectible.

Why It Matters

• It ensures that the balance sheet does not overstate the value of the company’s assets.

• Write offs can reduce a company’s tax liability by lowering its reported taxable income.

• They provide a realistic view of the company’s financial position by removing “dead” assets from the books.