charge-off

Word family

• charge off
  phrasal verbB2

Synonym discussion

Sense: verb/1

'Charge off' is the formal accounting term for recording an uncollectible debt as a loss on financial statements. 'Write off' is more common in everyday business language and can also refer to removing an asset's value from the books, but it is less precise in regulated accounting contexts. 'Write down' reduces the recorded value of an asset but does not remove it entirely — useful when partial recovery is still expected. 'Deduct' is a general tax term meaning to subtract an expense from taxable income; a charged-off debt may later be deducted for tax purposes, but the two actions are separate. 'Cancel' implies voiding the debt agreement, often by mutual consent, rather than simply recording a loss. For example, a bank charges off a defaulted loan in its quarterly statement, then later writes it off for tax purposes at year end.

Common collocations

Etymology

The term 'charge-off' comes from accounting practice, where 'charge' means to record a debit or expense entry in the ledger, and 'off' indicates removal from accounts receivable. The expression emerged in late-19th-century American banking as companies began systematically classifying and writing down uncollectible debts. It is closely related to the more widely used phrase 'write off', but 'charge off' became the preferred term in formal accounting standards.