What does writedown mean?
A writedown refers to a reduction in the value of an asset or an act of writing something down. This can occur when an asset's market value decreases, or when its value is deemed to be impaired. Writedowns are commonly used in accounting and finance to reflect changes in the value of assets, and can have significant implications for a company's financial statements and profitability. The term is often used interchangeably with write-off, although a writedown typically involves a partial reduction in value, whereas a write-off involves a complete elimination of an asset's value. Understanding writedowns is essential for investors, accountants, and financial analysts.
A reduction in the value of an asset
"The company announced a significant writedown of its assets."
Can be countable or uncountable.
To reduce the value of an asset
"The accountant will writedown the inventory due to obsolescence."
Used for countable instances of reductions in asset value.
"The company reported several writedowns in its quarterly financial statements."
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of writedown
The term writedown originated from the combination of 'write' and 'down', reflecting the act of reducing the value of an asset. The concept has its roots in accounting and finance, where it is used to adjust the value of assets to reflect changes in their market value or utility.
Usage notes
Commonly used in accounting and finance; can be countable or uncountable depending on context.