A media company that’s suddenly writing off the value of its content assets, though, may be going through a strategy shift. That shift in strategy may be caused by external factors that put pressure on the business to change, which may mean a period of disappointing financial results.
For stock investors, though, it’s important to remain focused on the future of the business, not the past. A write-off typically occurs after the negative event has already occurred. Management and accounting have determined it’s in the business’s best interest to write off an asset in order to provide the best returns going forward.
Ultimately, a business will take write-offs opportunistically, as they provide a way to reduce their tax bills and keep more cash in their pockets to invest in the future of the business.