The term write-off (or write-down) describes a reduction in recognized value. In
accountingterminology, it refers to recognition of the reduced or zero value of an asset. In income taxstatements, it refers to a reduction of taxable income as recognition of certain expenses required to produce the income. Write-off is also used in vehicle insuranceto describe a vehicle which is cheaper to replace than to repair, sometimes known as being a " totaled" car (a total write-off).
income taxcalculation, a write-off is the itemized deductionof an item's value from one's taxable income. Thus, if a person has a taxable income of $50,000 per year, a $100 telephone for business use would lower the taxable income to $49,900. If that person is in a 25% tax bracket, the tax due would be lowered from $7,481 to $7,456. Thus the net cost of the telephone is $75 instead of $100.
In business accounting, the term write-off is used to refer to an investment (such as a purchase of salable goods) for which a return on the investment is now impossible or unlikely. The item's potential return is thus canceled and removed from ("written off") the business's
balance sheet. Common write-offs in retail include spoiled and damaged goods.
Similarly, banks write off bad debt that is declared noncollectable (such as a loan on a defunct business or a credit card due that is now in default), removing it from their balance sheets.
A negative write-off refers to the decision not to pay back an individual or organization that has overpaid on an account. Negative write-offs can sometimes be seen as fraudulant activity if those who overpay a claim or bill are not informed that they have overpaid and are not given any chance to reconcile their overpayment or be refunded.
Some institutions such as banks, hospitals, universities, and other large organizations regularly perform negative write-offs, especially when the amount that is considered low dollar, i.e. $5.00 at some places or up to $15.00 or more at others.Fact|date=September 2008
A write-down is an accounting treatment that recognizes the reduced value of an
impaired asset. The value of an asset may change due to fundamental changes in technology or markets. One example is when one company purchases another and pays more than the net book valueof its assetsand liabilities. The excess purchase price is recorded on the buying company's accounts as goodwill. If it becomes apparent that the purchased company no longer has the value recorded in the goodwill account (it can't be resold at the same price), the value in the goodwill asset account is "written down".
A write-down is sometimes considered synonymous with a write-off. [cite web|url=http://www.websters-online-dictionary.org/wr/write-down.html|title=Definition: Write-down|publisher=
Webster'sOnline Dictionary|accessdate=2008-09-08] The distinction is that while a write-off is generally completely removed from the balance sheet, a write-down leaves the asset with a lower value. [cite web|url=http://www.investopedia.com/terms/w/writedown.asp|title=Write-down|publisher= Investopedia|accessdate=2008-09-08] As an example, one of the consequences of the 2007 subprime crisis at financial institutionswas a revaluation under mark to marketrules:
: "Washington Mutual will write down by $150 million the value of $17 billion in loans...": [cite web|url=http://www.washingtonpost.com/wp-dyn/content/article/2007/10/06/AR2007100600530.html|title=Washington Mutual 3Q Earnings to Tumble|publisher=
In Popular Culture
In the television sitcom "
Seinfeld" Kramer and Jerry discuss the topic using a circular logic:
Jerry: "So we're going to make the post office pay for my new stereo now?"
Kramer: "It's a write-off for them."
Jerry: "How is it a write-off?"
Kramer: "They just write it off."
Jerry: "Write it off what?"
Kramer: "Jerry, all these big companies- they write off everything."
Jerry: "You don't even know what a write-off is."
Kramer: "Do you?"
Jerry: "No. I don't"
Kramer: "But they do. And they're the ones writing it off."
* [http://www.muhealth.org/hpatfin/SMALL_BALANCE_WRITEOFF_POLICY.html SMALL BALANCE WRITE OFF POLICY for University of Missouri Hospital]
* [http://www.purdue.edu/uco/pdf/Accts_Rec/Small_Dollar_Balance_Write-Off_Policy.pdf Small Dollar Balance Policy at Purdue University]
* [http://www.co.alachua.fl.us/documents/bocc/agendas/2008-03-25/BB781EA5-101F-474E-8F7C-CB078ADC8444-79280889-72D9-4D89-9909-160EB1561DA9.HTM ALACHUA COUNTY Policy on Removal of Uncollectible Accounts from the Financial Statements (Amended)]
* [http://www.finsvc.duke.edu/gap/glaccts/exp69xx.html 696200 Miscellaneous Transaction Code is used for small dollar balances at Duke University]
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Look at other dictionaries:
write-off — write offs 1) N COUNT Something such as a vehicle that is a write off has been so badly damaged in an accident that it is not worth repairing. [BRIT] The car was a write off, but everyone escaped unharmed. 2) N COUNT A write off is the decision… … English dictionary
write off — vt 1: to eliminate (an asset) from the books: enter as a loss or expense write off a bad loan 2: to use as a deduction in calculating taxable income write off the cost as a business expense Merriam Webster’s Dictionary o … Law dictionary
write–off — / rīt ˌȯf/ n 1: the elimination of an asset or amount due from the books 2: tax write off Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 … Law dictionary
write-off — n 1.) BrE a vehicle that has been so badly damaged that it can never be used again ▪ The car was a complete write off. 2.) a period of time when you fail to achieve anything ▪ This morning was a complete write off. 3.) an official agreement that… … Dictionary of contemporary English
Write-Off — Списание (Write Off) сокращение стоимости актива или дохода из за увеличения количества расходов или убытков. Компании могут списать определенные расходы или провести их как операции по бизнесу и удержать из доходов. Например, выдан кредит,… … Финансовый словарь
write-off — index bad debt Burton s Legal Thesaurus. William C. Burton. 2006 write off … Law dictionary
write-off — noun count 1. ) an agreement that allows someone not to pay back the money they owe 2. ) something or an amount of money that a business or person does not have any more, or the record of such a loss 3. ) a period of time when you fail to achieve … Usage of the words and phrases in modern English
write off — ► write off 1) dismiss as insignificant. 2) cancel the record of (a bad debt); acknowledge the failure to recover (an asset). 3) Brit. damage (a vehicle) so badly that it cannot be repaired or is not worth repairing. Main Entry: ↑write … English terms dictionary
write-off — [rītôf΄] n. something written off, amortized, etc … English World dictionary
write-off — write′ off n. 1) bus a cancellation from the accounts as a loss 2) bus a reduction in book value; depreciation 3) cvb inf a person or thing that is given up as hopeless or pointless • Etymology: 1745–55 … From formal English to slang
write off — [v] devalue; forget about cancel, cross out, decry, depreciate, disregard, downgrade, give up, lower, mark down, shelve, take a loss on, underrate, undervalue; concept 54 Ant. figure … New thesaurus