Poistohäviö

Poistohäviö, a Finnish term, translates to "salvage loss" or "write-off loss" in English. It refers to the financial loss incurred when an asset is deemed unsaleable or unusable and must be disposed of, often at a significantly reduced value or for scrap. This typically happens when an asset has reached the end of its useful life, has been damaged beyond repair, or has become obsolete.

The process of poistohäviö involves an accounting write-down of the asset's value on a company's balance sheet. This reduction in value reflects the difference between the asset's book value and its realizable salvage value, which may be zero or a nominal amount. Companies must often account for these losses to accurately portray their financial position.

Common reasons for poistohäviö include physical deterioration, technological obsolescence, market fluctuations that render an asset unprofitable to maintain or sell at its carrying value, or significant damage from accidents or natural disasters. Managing poistohäviö is an important aspect of asset management and financial accounting, requiring careful assessment of asset condition and marketability. Proper disposal procedures are also crucial to avoid environmental liabilities.