Write down


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Write-Off

A reduction in an individual's or a company's income as the result of an expense. For example, an unpayable credit sale may be a write-off for the creditor, especially if the debtor declares bankruptcy. The bankruptcy means that the debtor is unable to pay the debt, which results in a loss of income for the creditor. A write-off may usually be deducted from one's taxable income.

Write down.

A write down occurs when a bank or investment firm reduces the value of an asset it holds in order to bring the assigned value in line with current market value.

Some write downs are customary, following a practice known as marking to the market. In this case, the fluctuating values of marketable securities in trading accounts are adjusted daily, writing them up if they have increased in value or writing them down if they have lost value.

Write downs may also be required to acknowledge that the prices at which securities are recorded on a firm's books exceed the amount they could be sold for, assuming they could be sold at all. The difference between book value and market value is recorded as a loss. Extensive write downs of a firm's assets can threaten the viability of the firm itself.

For example, in the wake of the subprime meltdown and the resulting tightening of credit starting in 2007, some investment banks were forced to write down billions of dollars of once highly rated collateralized debt obligations and other complex loan products that were structured with mortgages that defaulted.

References in periodicals archive ?
service, Chaney and others - children included - will take three to five minutes to write down their negative thoughts before setting them afire and watching them burn.
In addition, if bonds were to take a principal write down, they have the ability to be written back up.
9 million to write off goodwill and write down other related intangible assets by approximately $1.
At this point it is unclear the size of the write down that will be reported on the next Borrowing Base Calculation Report.
4 million, after tax, write down recognized by the Company against its investment in the Aircraft Finance Trust ("AFT") and a $5.
Equity market volatility also caused a write down of a further S$5 million in the investment portfolio during the year.
Due to the decrease in operating results coupled with the non-cash write down of this investment, the Company expects an overall loss of $.