Write Down

A write-down reduces the book value of an asset to align with its current market value. This adjustment is necessary when an asset's value declines, ensuring financial statements accurately reflect the asset's worth. Write-downs can occur due to various factors, including underperformance, market shifts, or changes in business conditions, and are crucial for maintaining transparent financial reporting.

• Reduces an asset's book value to market value.
• Common in VC and PE when portfolio companies underperform.
• Ensures accurate financial reporting.
• Provides investors with a realistic view of asset value.