Goods written off
Writing off goods removes inventory whose carrying amount is no longer recoverable, such as destroyed, missing or completely obsolete items. Where some value remains, inventory may instead be written down to net realisable value. Recognise the loss in the relevant period; it is not a capital reserve movement. The adjustment also ensures unusable stock does not inflate current assets.
Worked example
Goods costing $800 can now be sold for only $300, with $50 selling costs: write them down to $250 and recognise a $550 loss.
Common mistake
A write-down to net realisable value is not always a full write-off to zero. Use the recoverable amount supported by the facts.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Supporting | July 2027–August 2028 |
| ACCA | F3 | Supporting | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Supporting | July 2027–August 2028 |
| CIMA | F1 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |