[1] This means that deductible items must be usual and required for the business owner's field of work.
Similarly, banks write off bad debt that is declared non collectable (such as a loan on a defunct business, or a credit card due that is in default), removing it from their balance sheets.
A negative write-off refers to the decision not to pay back an individual or organization that has overpaid on an account.
[citation needed] A write-down is an accounting treatment that recognizes the reduced value of an impaired asset.
[3] The distinction is that while a write-off is generally completely removed from the balance sheet, a write-down leaves the asset with a lower value.
[4] As an example, one of the consequences of the 2007 subprime crisis for financial institutions was a revaluation under mark-to-market rules: "Washington Mutual will write down by $150 million the value of $17 billion in loans".