How to Write off Obsolete Inventory?

Obsolete inventory is written-down by debiting expenses and crediting a contra asset account, such as allowance for obsolete inventory. The contra asset account is netted against the full inventory asset account to arrive at the current market value or book value.

Is obsolete inventory tax deductible?

For tax purposes, a company is able to take a deduction on their tax return for obsolete inventory if they are no longer able to use the inventory in a “normal” manner or if the inventory can longer be sold at its “normal” price.

Can you write off old inventory?

Can I write off expired inventory? Expired inventory can be written off as if it were lost or damaged because it has lost its market value and can no longer be used for its normal intended purposes.