An inventory write-off removes or reduces inventory when goods are no
An inventory write-off is the accounting reduction of inventory when goods are damaged, obsolete, lost, or otherwise no longer recoverable at their recorded amount.
The write-off reduces the inventory asset and recognizes the related loss or expense.
Inventory write-offs are commonly triggered by:
An inventory write-off keeps inventory from remaining on the balance sheet above the amount the business can realistically recover.
It is closely connected to inventory adjustment, net realizable value, and the lower of cost and net realizable value rule.