Write-Down

A write-down is a partial reduction in the book value or carrying amount of an asset when the recorded amount is no longer supportable.

It is narrower than a full Write Off. A write-off usually removes the asset or receivable entirely, while a write-down lowers it but does not reduce it to zero.

When a Write-Down Happens

Write-downs commonly appear when:

• inventory can no longer be sold at expected value
• equipment has been damaged or become obsolete
• an acquired asset no longer supports its recorded carrying amount
• market evidence shows the asset is materially overstated

Inventory

Inventory may be written down when cost exceeds net realizable value.

Long-Lived Assets

Property, equipment, or intangible assets may be written down when recoverability deteriorates.

Goodwill and Acquisition Accounting

For acquired businesses, part of the recorded value may need to be reduced when expected benefits no longer support the carrying amount.

Write-Down vs Impairment

In practice, write-down and impairment are often used closely together. Impairment is the accounting condition or test result showing that carrying amount exceeds recoverable amount. A write-down is the reduction recorded as a result.

Write-Down vs Write-Off

• a write-down is partial
• a write-off is usually total or near-total derecognition

That distinction matters for both financial statement presentation and later recovery expectations.

Related Terms

• Impairment
• Impairment Loss
• Net Book Value
• Write Off

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