Fundamental Glossary / Earnings & Accounting Concepts
Write-Offs
Removing an asset from the books because it is worthless or no longer recoverable, and recognising the loss.
Formula
The gross amount is written off against a provision already held, or charged to profit if no provision exists.
What it means
A write-off of a receivable, inventory, or goodwill turns a hopeful asset into a confirmed loss. If a provision already covered it, profit may not move again. The cash was already gone or never arrives.
Write-offs clean the balance sheet. A company that never writes anything off is not necessarily healthier. It may be carrying dead assets.
How to read it
A large write-off after years of aggressive recognition is the bill for low-quality earnings arriving at once. The years before the write-off were the ones to question.
What to watch
Technical write-offs, where a bank still pursues recovery, mean the accounting loss is taken and some cash may still return. Do not assume every written-off rupee is gone forever, and do not assume it will come back.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.