Charge-Off

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CHARGE-OFF

Eliminate or write off.

The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless.

A classic case is the bad debt, which is an uncollectible debt. A bad debt is a permissible business tax deduction, and a non-business bad debt may also be claimed as a charge-off in the year the debt becomes entirely worthless. Charge-off is generally used in reference to a charge or debt that is not paid when due.