Written-Down Value


DEFINITION of 'Written-Down Value'

The value of an asset after accounting for depreciation or amortization. Written-down value is also called book value or net book value. It is calculated by subtracting accumulated depreciation or amortization from the asset's original value. Written-down value reflects the asset's present worth from an accounting perspective. An asset's written-down value will appear on the company's balance sheet.

BREAKING DOWN 'Written-Down Value'

Written-down value can be calculated by a method of depreciation that is sometimes called the diminishing balance method. This accounting technique reduces the value of an asset by a set percentage each year. Different depreciation techniques are used to capitalize the expenses of different types of assets. The taxable gain on a sale is often determined by comparing the sales from the item to its written-down value. When an asset is intangible, such as a patent, it is amortized rather than depreciated.

  1. Amortization

    1. The paying off of debt in regular installments over a period ...
  2. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  3. Asset

    1. A resource with economic value that an individual, corporation ...
  4. Write-Down

    Reducing the book value of an asset because it is overvalued ...
  5. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
  6. Accountant

    A professional who performs accounting functions such as audits ...
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  1. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
  5. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
  6. What can working capital be used for?

    Working capital is used to cover all of a company's short-term expenses, including inventory, payments on short-term debt ... Read Full Answer >>

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