Film Accounting Glossary
Write-off
What is a write-off?
Also called writeoff, or bad debt.
A write-off is the removal of an asset or receivable from the books once it is accepted as unrecoverable: an abandoned development project, an uncollectible holdback, or a disallowed incentive claim.
It recognizes reality rather than creating a loss, since the money was already gone. On the vendor side, writing off a production's unpaid invoice is the moment a receivable becomes a bad debt, which is why credit checks precede large rentals.
Example
A $46,000 incentive disallowance and a $12,000 uncollectible holdback are written off at year end. The money was already gone; the write-off only records that fact. On the vendor side, writing off a production's unpaid invoice is the moment a receivable becomes bad debt.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Company-level accounting at year-end close, and the reason vendors run credit checks before large rentals.
Common mistake
Treating a write-off as creating a loss. The money was already gone; the write-off only records that it is not coming back.
Related questions
- What gets written off on a film production?
- Abandoned development, uncollectible holdbacks, disallowed incentive claims, and on the vendor side, invoices a production will not pay.
- When does a vendor write off a production's invoice?
- Once it is accepted as uncollectible, at which point the receivable becomes bad debt. It is why vendors credit-check before large rentals.