Take the writedown2/20/2023 ![]() ![]() later had to write down by $2.8 billion because of declining advertising revenues. One example is when Rupert Murdoch's News Corp bought Wall Street Journal publisher Dow Jones at a 60% premium in 2007, which News Corp. If it becomes apparent that the purchased asset no longer has the value recorded in the goodwill account (i.e., if the asset cannot be resold at the same price), the value in the goodwill asset account is "written down". The excess purchase price is recorded on the buying company's accounts as goodwill. One example is when one company purchases another and pays more than the net fair value of its assets and liabilities. The value of an asset may change due to fundamental changes in technology or markets. Write-down Ī write-down is an accounting treatment that recognizes the reduced value of an impaired asset. Some institutions such as banks, hospitals, universities, and other large organizations regularly perform negative write-offs, especially when the amount is considered low (e.g., $5 at some institutions or up to $15 or more at others). Negative write-offs can sometimes be seen as fraudulent activity if those who overpay a claim or bill are not informed that they have overpaid and are not given any chance to reconcile their overpayment or be refunded. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues.Ī negative write-off refers to the decision not to pay back an individual or organization that has overpaid on an account. A reduction in the value of an asset or earnings by the amount of an expense or loss. Similarly, banks write off bad debt that is declared non collectable (such as a loan on a defunct business, or a credit card due that is in default), removing it from their balance sheets. In commercial or industrial settings, a productive asset may be subject to write-off if it suffers failure or accident damage that is infeasible to repair, leaving the asset unusable for its intended purpose. Common write-offs in retail include spoiled and damaged goods. The item's potential return is thus canceled and removed from ('written off') the business's balance sheet. In business accounting, the term 'write-off' is used to refer to an investment (such as a purchase of sellable goods) for which a return on the investment is now impossible or unlikely. ![]() For example, a telemarketer may deduct the purchase of a phone since phones are used normally and necessarily in their work, whereas a saxophonist may not. This means that deductible items must be usual and required for the business owner's field of work. In order for business owners to write-off business expenses, the IRS states that purchases must be both ordinary and necessary. Thus the net cost of the telephone is $75 instead of $100. If that person is in a 25% tax bracket, the tax due would be lowered by $25. Thus, if a person in the United States has a taxable income of $50,000 per year, a $100 telephone for business use would lower the taxable income to $49,900. The company said it is "remaining financially prudent" on new development as gold prices remain low.Įldorado's year-end financial statements are to be released on March 23.In income tax calculation, a write off is the itemized deduction of an item's value from a person's taxable income. In a news release Monday, Eldorado estimated 2015 gold production at 723,532 ounces, more than expected, at an average cash cost of $841 per ounce. Its Hellas Gold unit is fighting in court to get the go-ahead on projects.Ĭonstruction and development activities at the Skouries Project which includes a processing plant have been suspended and the company says it will suspend its Olympias mining project unless it receives approvals by March. "Looking at Eldorado's long-term plan, the company remains committed to its portfolio of Greek assets and the realizable benefits to all of the stakeholders involved," he said in a statement. Greek government halts production at Canadian-owned gold mineĮldorado Gold CEO Paul Wright said the company would like to continue development on the site. ![]() Eldorado Gold suspends all mining work in northern Greece. ![]() Eldorado Gold is taking a writedown of $1.2 to $1.6 billion in 2015 on its Greek assets, after being forced to slow production and development at mines in that country.Ī government decision revoked a mining permit on environmental concerns prompting a political standoff between local miners who want to work and environmentalists who are concerned about the project. ![]()
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