A write off is an accounting transaction which reduces the value of an asset to $0 and creates an expense. An asset is written off when it is no longer usable or becomes obsolete. A write down is a similar accounting transaction which reduces the value of the asset because of damage.
Write off
A business computer had an original price of $2000. When the company bought a new computer, it wrote off the full value of the old computer because it was obsolete. So the $2000 was considered as an expense and the value of the old computer was listed as $0.
Write down
A business had a piece of machinery which was old and worn but still usable. The original price was $10,000, but the damage/wear and tear caused its current value to be $6,000. The $4,000 write down created an expense for the company and the new value of the machine was listed as $6,000.
