What is Write-Off?
A write-off is when the value of an asset is written down and removed from the books. When this happens, it loses all its monetary worth. For example, if a piece of equipment is no longer working, a write-off might be necessary. To write off the asset, you must reduce the asset's value in your company's records to zero. To be eligible for a write-off, you must be able to establish that a certain asset of your company has no market worth.
On the other hand, a write down is where an asset’s value is decreased to make it less valuable. For example, when assets are held for a long period of time, their value might drop. While the object may still have some value, it is worth less than it was when it was first purchased.