What does the term 'write-off' refer to in property management?

The term 'write-off' in property management primarily refers to the process of removing an asset from financial statements. When an asset is deemed to have no remaining value or is no longer usable due to factors such as damage, obsolescence, or theft, it is written off to reflect this change in its status on the financial records. This process ensures that the financial statements provide an accurate representation of the organization's resources and liabilities.

Writing off an asset is important for maintaining the integrity of financial reporting and allows organizations to focus on their current assets and their associated values more accurately. It impacts the balance sheet and income statement, as removing an asset can also affect net income through loss recognition.

In contrast, increasing an asset's value implies a different process, such as revaluation, and selling an asset at a loss refers to a transaction rather than the accounting treatment of an asset no longer held. Similarly, depreciation is a systematic allocation of an asset's cost over its useful life, rather than a complete removal from financial statements.