charge off


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Charge off

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.

charge off

See write off.

charge off

To discontinue accounting for some or all of a promissory note and its accrued interest as an asset of the lender.If a loan is partially or totally uncollectible,then it is partially or totally worthless and cannot constitute an asset.This is an accounting function only; the lender may still pursue collection activities and then rebook the money as a cash asset when and if there is a recovery.

References in periodicals archive ?
Accordingly, tax advisers should be certain to charge off an amount on the taxpayer's books if partial worthlessness is suspected--even if a tax deduction is not claimed--in order to preserve the deduction if later disputes arise as to total worthlessness.
To comply with the new FFIEC regulations, Bank One/First USA will now charge off bankrupt and deceased accounts 60 days after notification.
Both transactions require the servicer to charge off a loan when it is more than 180 days delinquent, if the servicer does not believe that any recovery could be made through foreclosure proceedings.