Write down

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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 ?
VI) has announced that it would write down goodwill on its Romanian, Ukrainian and Serbian units.
b) Includes provision for write down of property of $2,186 and $943 for the years ended Dec.
To the extent allowed by these rules, taxpayers should write down inventory before transferring it to related parties in order to minimize the related-party loss limitations.
More than a third of employees write down or electronically record their passwords, creating significant vulnerabilities.
The new rules require companies to write down the value of businesses they acquired if it is determined that those companies have lost value.
Therefore, we did not take a write down in the third quarter nor do we anticipate taking further write downs.
The average principal write down for the past three months was $33,512.
Longtime church member Terri Chaney is eagerly looking forward to the ceremony, which requires participants to write down thoughts about negative behaviors, fears or other unhappy situations and put them to rest by burning the paper.