writedown

Vocabulary Word

Definition

The term 'writedown' means to lower the book value of an asset because it is overvalued compared to the market value. It's like getting a reality check on what things are actually worth.

Examples in Different Contexts

In tech companies, 'writedown' of outdated technology is common. A CFO might assert, 'Regular writedowns on obsolete tech ensure our balance sheet remains accurate, reflecting the realistic value of our technological assets.'

Practice Scenarios

Business

Scenario:

Our property's market value is significantly less than its recorded value. We must make critical decisions.

Response:

I agree. We have to writedown our property value to match the market price.

Tech

Scenario:

Our recent software investment is showing slower growth than we predicted. What's our next move?

Response:

We should consider a writedown of this investment based on its current performance.