A write-off is a recognized value reduction of something. In accounting, this is the recognition of the zero or zero value of an asset. In the income tax return, this is a reduction in taxable income, in recognition of certain costs necessary to generate revenue.
Video Write-off
Income tax
In the calculation of income tax, a write-off is a detailed itemed item on the value of an item of a person's taxable income. So if someone in the United States has a taxable income of $ 50,000 per year, a $ 100 phone for business use will lower taxable income to $ 49,900. If the person is in a 25% tax bracket, the tax payable will be reduced by $ 25. Thus the net cost of the phone is $ 75 instead of $ 100.
Maps Write-off
Accounting
In business accounting, the term write-off is used to refer to investments (such as purchases of goods that can be sold) in which the return on investment is now impossible or impossible. The potential return of the item is therefore canceled and removed from ("written off") the company's balance sheet. Common removals in retail include damaged and damaged goods. In commercial or industrial settings, productive assets may be subject to write-offs if they suffer from accidental failure or damage which is not feasible to be repaired, leaving assets unusable for the intended purpose.
Banking
Similarly, banks remove bad debts that are otherwise uncollectible (such as loans on non-functioning businesses, or credit cards that are the default), removing them from their balance sheets. Reduction in the value of an asset or income by the amount of cost or loss. Companies can remove certain expenses necessary to run a business, or have occurred in a business operation and reduce retained earnings.
Negative removal
Negative retraction refers to the decision not to pay back individuals or organizations that pay more on the account. Negative deletions can sometimes be seen as fraudulent activity if those who pay more claims or bills are not informed that they have paid more and are not given an opportunity to reconcile their overpayments or are refunded.
Some institutions such as banks, hospitals, universities, and other large organizations regularly make negative removals, especially when they are considered low (e.g., $ 5 in some institutions or up to $ 15 or more in others).
Writedown
Writedown is an accounting treatment that recognizes the reduced value of a defective asset. Asset values ​​may change due to fundamental changes in technology or markets. One example is when one company buys another and pays more than the net fair value of its assets and liabilities. Excess purchase price is recorded on the account of the purchasing company as a goodwill. If it is clear that the purchased asset no longer has a carrying amount in the goodwill account (ie, if the asset can not be resold at the same price), the value in the goodwill asset account is "written down". An example of this is when Rupert Murdoch's News Corp bought Dow Jones' publisher Wall Street Journal at a premium of 60% in 2007, which was then written by News Corp. by $ 2.8 billion due to a decrease in advertising revenue.
Addition is sometimes considered identical to deletion. The difference is that while deletion is generally removed from the balance sheet, a writedown leaves the asset with a lower value. For example, one of the consequences of the 2007 subprime crisis for financial institutions is a reassessment under a market regulatory mark: "Washington Mutual will list $ 150 million for $ 17 billion in loans".
See also
- Amortization
- Depreciation
- Thinning
- Charging
References
External links
- Small Dollar Balance Policy at Purdue University
- Alachua County Policy on Stolen Account Deletion from Financial Statements (Modified)
- 696200 The Other Transaction Code is used for small dollar balances at Duke University
Source of the article : Wikipedia
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