Write-Off
Definition
Removing an asset's value from the books because it no longer has value, such as an uncollectible invoice or inventory that has been thrown away.
Want a deeper explanation?
Write-offs clean up the balance sheet so it reflects reality. They are a normal part of running a product business.
Keep a record of why each was made, for taxes and for future buyers. Watch for: write-offs made only at year-end, which can turn one month into an unexpected loss.
Example
300 expired units costing $1,800 are disposed of, and their cost is written off to an inventory loss account.