|
When we sell capacity, what is written off? |
|
If you sell all of the capacity, left over inventory is liquidated at 50 cents on the dollar. You see half the value of your inventory converted to cash, and half is expensed as a write-off on your Income Statement.
Capacity is sold at 65% of the original value of the equipment. If the net equipment value after depreciation is less than 65% of the original value, you make money on the sale. If greater than 65%, you lost money on the sale. The gain or loss is reported on your Income Statement as a write-off. If you see a negative write-off on the Income Statement, that means a negative expense (i.e., income). A positive value for a write-off is simply an ordinary expense.
|
