What is a write-down?

Question

Lately when I read the paper or listen to the news I always hear about some major company like citigroup or wellsfargo taking "write-downs". I own my on business and I know I'm either making money or I'm not making money. Sounds to me like some made up term for cooking the books and making things look better then they actually are. Can someone explain how write-downs work?

Answer 1

these are typically references to loans that were carried as assets but now need to be treated as expense due to defaults