Dictionary / Write Down
What does Write Down mean in accounting?
Quick definition
GeneralTo transfer a part of the balance of an asset account to an expense account or to profit and loss. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
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Examples
Last year's bags, still sellable
You run an outdoor outfitter. At the April 30 count you still have 12 last-year sleeping bags from a gear supplier that cost $84 each, so inventory shows $1,008. The new model arrived in March, and you can only move the old bags at $45. Write down $468: in QuickBooks Online or Xero, post an inventory adjustment that reduces Inventory $468 and hits cost of sales or an inventory write-down expense. Leave $540 on the valuation report (12 × $45). Do not write off the whole $1,008; you still own bags you can sell.
Frozen gallons are a write-off
You run a paint shop. After a January 11 warehouse freeze, 22 gallons of leftover porch enamel from a coatings supplier separated and will not mix ($31 a gallon, $682). Transfer the whole $682 from inventory to expense: that is a write-off, not a write-down. A write-down would leave a leftover inventory balance as if those gallons still had sale value. In QuickBooks Online or Xero, post an inventory adjustment that zeros those 22 gallons. Check the valuation report; that lot should be gone.
Why it matters
A write-down moves only part of an asset's remaining balance to an expense account or to profit and loss. You will not post this most months; it shows up after a count finds inventory that still has some value but not what you paid, or after equipment is damaged or obsolete but still in use. Skip it and the balance sheet overstates assets while that period's profit looks too strong. A write-off takes the whole remaining asset to expense, and a write-up raises book value with no cash outlay, which you usually should not do.
Further reading
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What is Write Down in bookkeeping?
To transfer a part of the balance of an asset account to an expense account or to profit and loss.
When should I use Write Down?
Use Write Down when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with Write Down?
Write Down is used for write down entries, while Work Sheet covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.