Apr 25, 2025 · An inventory write-down occurs when a business reduces the recorded value of its inventory because it is no longer worth its original cost, typically due to damage, obsolescence, or …

Dec 30, 2023 · How to Write-Down Inventory? Compliance with U.S. GAAP reporting standards mandates that companies write off inventory as an expense right after the determination that the inventories …

Sep 18, 2025 · In this article, learn what an inventory write-down entails, inventory accounting best practices, and how a 3PL like ShipBob can help you better track, manage, and report on your inventory.

Nov 20, 2020 · When an inventory’s fair market value drops below its book value, a journal entry is made in the inventory write-down expense account or cost of goods sold (COGS) account depending on the …

Guide to what is Inventory Write-Down. We explain the journal entries and difference with inventory write-off, along with examples.

Nov 30, 2025 · When an inventory ’s value decreases below the cost of purchasing or producing it, you need to record it on the books as an expense. To do so, you make an inventory write-down. You’re …

Dec 11, 2025 · Discover what an inventory write-down is, learn how to record one correctly, then review an example, tips and FAQs to help aid your understanding.

2 days ago · The direct write-off method requires writing down unsold inventory that's lost value as a “bad debt expense.” For example, a company that sells mobile phones had inventory worth $10,000 in …

How to Perform an Inventory Write Down? First, the accountant needs to determine the size of the inventory’s reduction. If it is relatively small, the accountant can factor the decrease in the company’s …

Sometimes, the value of inventory will drop significantly due to physical deterioration, obsolescence, or decline in the market price, etc. Likewise, if this happens, the company will need to make the inventory …