Glossary
What is Inventory Write-Down?
Last updated July 2026
Definition
An inventory write-down reduces the book value of stock when its market value falls below cost. A full write-off takes the value to zero. Both hit earnings.
Also known as: inventory write-off
Write-downs are the accounting consequence of unmanaged excess and obsolescence. They're recognized through the excess-and-obsolete (E&O) reserve and flow through the income statement.
Because they surface at period-end, they often feel like a surprise — which is why continuous visibility into the idle tail matters.
Sources: Industrial Supply Magazine
Part of Excess & obsolete inventory.
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