Asset write-off: how to handle it in accounting in 2026?

A write-off removes the asset from the balance sheet without consideration: accumulated depreciation and gross value are cleared, and any remaining net book value is charged to account 657, within operating expenses since ANC regulation 2022-06. That charge is deductible for tax purposes in the same financial year. If the asset is fully depreciated, the entry is neutral. No VAT adjustment is required for an asset that has become permanently unusable.

The write-off (or retirement) of a fixed asset occurs when an asset leaves the company's use for the long term, with no real disposal value. The topic seems technical, but it directly affects the reliability of the accounts, the net book value and sometimes the tax result. In 2026, with accelerating technological obsolescence and new environmental rules, asset write-offs are increasingly frequent in French companies.

A write-off is the operation by which a company decides to permanently remove an asset from its fixed-asset register because that asset has become unusable, obsolete or too costly to maintain. Unlike a sale, the write-off does not generate any financial consideration.

Quick answer: an asset write-off is recorded by simultaneously removing the asset's gross value (credit of a 21x account) and its accumulated depreciation (debit of a 28x account). The difference, called net book value (NBV), is recognized as an expense in the debit of account 657 "Net book value of disposed tangible and intangible fixed assets". This expense is deductible from the tax result, provided you keep supporting documentation.

Write-off, sale or reform: what are the differences?#

These three notions are often confused. Here is how to tell them apart:

Reform is a term often used in the French public sector or for company-fleet vehicles. In the private sector, the standard term is write-off. A sale, on the other hand, involves a transfer to a third party and the calculation of a capital gain or loss.

To explore further, see Capitalized production: accounting treatment, Trading account and Monthly closing reinforcement.

A write-off can apply to all categories of tangible fixed assets recorded on the balance sheet:

• IT equipment: computers, servers, printers that have become obsolete (average useful life: 3 to 5 years)
• Office furniture: desks, chairs, cabinets that are worn out or no longer comply with current ergonomic standards
• Vehicles: cars or commercial vehicles that are too old or damaged, with no economic interest in repairing
• Industrial machinery: production equipment replaced by more efficient models
• Software: outdated licenses or licenses incompatible with new information systems
• Fittings and installations: premises fittings that have become unsuitable after a renovation or relocation

In 2026, accelerated hardware refresh cycles and IT-security obligations are pushing more equipment out of use, so the question arises more often than before, on volumes that show up in the balance sheet.

The accounting principle#

The write-off of a fixed asset results in the simultaneous removal of the gross value and the accumulated depreciation of the asset concerned. The difference between the two represents the remaining net book value (NBV), which is an expense for the company.

The removal entry is set out in article 1212 of the French Chart of Accounts (Plan Comptable Général, PCG, ANC regulation 2014-03), and the disclosure on "removals or write-offs" in articles 832-1 and 832-2. Article 321-1, often quoted here, defines a liability: it does not govern the removal of an asset. On the tax side, the deductibility of the residual value is confirmed by BOI-BIC-CHG-60-20-10.

Write-off accounting entries#

1. Removing the asset from the balance sheet:

• Debit account 657 "Net book value of disposed tangible and intangible fixed assets": NBV of the asset
• Debit account 28x "Depreciation": accumulated depreciation
• Credit account 21x "Fixed asset": original gross value

2. If the asset triggers dismantling or removal costs:

• Debit the external-services expense account matching the invoice (collection, dismantling)
• Credit account 401 or 512: supplier or bank

Worked example: writing off an IT server#

Illustrative case. A simplified joint-stock company (SAS) writes off an IT server acquired on January 1, 2023 for 5,000 EUR excluding VAT, depreciated on a straight-line basis over 5 years (rate of 20% per year). The financial year matches the calendar year.

At the date of write-off, on December 31, 2025 (year-end):

• Original gross value: 5,000 EUR
• Annual depreciation: 5,000 EUR x 20% = 1,000 EUR/year
• Accumulated depreciation (3 full years: 2023, 2024, 2025): 3,000 EUR
• Remaining NBV: 5,000 EUR - 3,000 EUR = 2,000 EUR

The accounting entry at 12/31/2025:

The 2,000 EUR expense reduces the accounting result and, as a consequence, the tax result for the financial year.

Case of a fully depreciated asset#

If the asset is fully depreciated (NBV = 0 EUR), the write-off does not generate any expense. The entry is limited to a set of bookings that is neutral for the result:

• Debit 28x: accumulated depreciation
• Credit 21x: gross value

No impact on the income statement.

Deductibility of the net book value#

The remaining NBV is deductible from the tax result of the financial year in which the write-off is decided. This expense reduces the taxable profit and therefore the corporate income tax (IS). For a company subject to IS at the standard rate of 25% (rate in force in 2026), an NBV of 2,000 EUR represents a tax saving of 500 EUR.

This deductibility is confirmed by doctrine BOI-BIC-CHG-60-20-10 on losses resulting from the disappearance or destruction of property.

VAT and write-off: do you need to regularize?#

A write-off generally does not trigger a VAT (value-added tax) regularization when the asset is destroyed or rendered permanently unusable. Since the asset is no longer used in operations, no supply is recorded.

On the other hand, two situations require particular vigilance:

• Donation of the asset to an association: this is a free supply subject to VAT. A regularization of the VAT initially deducted is required (article 207 of Annex II to the French General Tax Code (CGI)).
• Transfer for consideration at a symbolic price: if the asset is sold, even at a very low price, this is a sale and not a write-off. VAT will apply to the sale price.

Capital gain or loss on disposal#

By definition, a write-off generates neither a capital gain nor a capital loss on disposal, since there is no financial consideration. The NBV is simply recognized as an expense. That is what fundamentally distinguishes a write-off from a sale of fixed assets.

A poorly documented write-off is one of the first causes of reassessment during a tax audit. An expense recorded without supporting evidence is among the simplest items for an inspector to reinstate. Here is the procedure we recommend to our clients:

1. Check the inventory#

An up-to-date inventory is indispensable. It must make it possible to identify the asset, its gross value, its depreciation period and the depreciation already booked. Without an inventory, the write-off becomes an approximate exercise and a source of accounting errors.

2. Identify the asset precisely#

Each asset to be written off must be clearly identified:

• Inventory number
• Precise description and serial number
• Acquisition date and supplier
• Original gross value
• Depreciation period and method
• Accumulated depreciation at the exit date

3. Draft a write-off minute#

The write-off must be documented by a formal decision:

• Minute signed by the director or the technical manager
• Photos of the asset (if relevant)
• Destruction certificate or donation receipt
• Collection slip from an approved recycling company

4. Comply with environmental obligations#

Since 2026, French companies must comply with stricter waste-management obligations:

• WEEE (Waste Electrical and Electronic Equipment): IT equipment must be handed over to approved channels (eco-organizations such as Ecosystem or Ecologic)
• Recycling: obligation to sort and recover materials in accordance with the French Environmental Code
• Destruction certificates: documents to be kept for six years, the retention period for supporting records set by article L102 B of the French Book of Tax Procedures

5. Determine the exit date#

The write-off date determines the accounting period to which the expense is allocated. It must correspond to the effective date of the exit decision, not necessarily to the date of physical destruction.

Hayot Expertise tip: a poorly documented write-off often creates inventory discrepancies and phantom assets that degrade the quality of the accounts. During a tax audit, the absence of supporting documentation can lead to the reinstatement of the expense and 40% penalties for deliberate misconduct.

The "675 or 658" debate is settled, and it is settled by the disappearance of both accounts as they used to be quoted. ANC regulation 2022-06 of 4 November 2022, approved by order of 26 December 2023 and mandatory for financial years opening on or after 1 January 2025, removed account 675 "Net book values of disposed assets". The carrying amount of a fixed asset leaving the balance sheet now goes to account 657 "Net book value of disposed tangible and intangible fixed assets", presented within operating expenses rather than exceptional charges; for a financial fixed asset, the chart of accounts provides account 6671.

Account 658, for its part, is no longer titled "Other current management expenses" but "Penalties and other charges": it can no longer carry a net book value on removal. Here is the chart of accounts applicable from 1 January 2026.

Two accounts still quoted by earlier commentary have gone: 675 and 6788, class 67 now containing only 672 and 678. The chart of accounts provides no account specific to a write-off: account 657 refers to fixed assets "disposed of", and using it for a removal without consideration is a point to document in the closing file.

An SAS donates to an association a utility vehicle acquired for 30,000 EUR excluding VAT on January 1, 2022, depreciated over 5 years, i.e. 6,000 EUR excluding VAT per year. On June 30, 2026 (donation date), accumulated depreciation amounts to 27,000 EUR and the NBV to 3,000 EUR.

VAT deducted at acquisition: 30,000 x 20% = 6,000 EUR.

The applicable regime is not an adjustment. The free transfer of an asset that gave rise to a right of deduction is treated as a supply of goods for consideration under article 257, II-1-1° of the French General Tax Code: the transaction is taxed, and it does not call for repaying a fraction of the tax initially deducted. The global adjustments of article 207 of Annex II respond to other, exhaustively listed events: a disposal not subject to the tax, cessation of business, a change of use, a transfer between sectors. Computing a repayment "in fifths" on a donation therefore applies the wrong text, and the characterisation must be settled before any calculation.

For the record, where the article 207 adjustment does apply, it is not computed month by month but in annual fifths for a movable fixed asset, and in twentieths over twenty years for a building.

Accounting entries at 06/30/2026:

The VAT due on the deemed supply is determined separately, once the characterisation has been settled.

Corporate sponsorship, CGI art. 238 bis: the donation is not deductible from taxable profit, the text excludes that expressly. It gives rise to a tax reduction of 60% on the portion of payments up to EUR 2,000,000 and 40% above that, payments being taken into account up to EUR 20,000 or 5 per thousand of turnover, whichever is higher.

For groups that prepare both French statutory accounts (PCG) and IFRS consolidated accounts, the treatment differs slightly.

IFRS imposes a higher level of discipline: testing the recoverable amount (IAS 36) before any write-off, to prevent a late impairment test from masking a loss that should have been booked earlier. The PCG is more permissive on this point.

For French subsidiaries of foreign groups, the practical consequence is twofold. First, the local statutory file must rely on PCG entries (account 657 in the trial balance, table 2054 in the tax return), so that the French tax authority (DGFiP) and statutory auditor can audit the write-off without ambiguity. Second, the IFRS reporting package sent to the parent must restate the timing of the loss if a recoverable-amount test should have triggered an earlier impairment under IAS 36. A reconciliation memo between the PCG ledger and the IFRS reporting package is essential to avoid an audit comment at group level and to ensure that the carrying amount of the asset is consistent in both reference frameworks.

Confusing write-off and impairment#

An impairment (account 6816, impairment charges on tangible and intangible fixed assets) records a lasting loss of value but the asset stays on the balance sheet. A write-off (account 657) records the final removal of the asset. These are two distinct accounting treatments that must not be mixed.

Forgetting to remove the accumulated depreciation#

Some accountants book the NBV as an expense but forget to remove the accumulated depreciation. As a result, the balance sheet keeps showing depreciation for assets that no longer exist, which distorts the reading of the company's net asset position.

Not documenting the decision#

Without a minute or a formal decision, the write-off is hard to defend during a tax audit. The tax authority may consider that the asset still exists and reject the expense, with the resulting surcharges.

Writing off assets that are still usable#

If an asset can still be used or sold, its write-off may be challenged by the inspector. The tax authority may see it as an artificial reduction of the result. In such a case, it is better to consider a sale, even at a symbolic price.

Rather than destroying an asset that is still functional, the company may consider donating it to an association. This option has several advantages in 2026:

• Positive CSR impact: a concrete contribution to the circular economy and waste reduction
• Similar accounting treatment: NBV is recognized as an expense (account 657)
• Tax benefit: the donation gives rise to a tax reduction of 60% or 40% depending on the amount paid (article 238 bis of the CGI), not to a deduction from profit
• Donation certificate: solid and undisputable evidence for a tax audit

This approach combines accounting rigor and a responsible posture, a strong argument for companies that care about their image. In practice, the donation should be formalized by a written agreement between the company and the receiving association, and the receiving entity must be eligible under article 238 bis of the CGI. Checking that the donated asset is consistent with the association's purpose is worth the few minutes it takes: a donation that visibly serves the company's marketing more than the association's mission exposes the tax reduction to challenge.

We can help you redo the inventory, document asset exits and secure the closing of the accounts. Our approach includes:

1. Audit of the fixed-asset register: identification of discrepancies and anomalies
2. Physical inventory: verification that the assets actually exist
3. Accounting clean-up: documented write-off entries
4. Process implementation: a monitoring procedure to avoid future drifts

Quick link: Make your closing accounts more reliable

A write-off must not be handled as a simple year-end entry. It is an inventory, evidence and balance-sheet-quality matter. A rigorous treatment, built on precise identification, complete documentation and correct accounting entries, guarantees the reliability of your accounts and protects you in case of a tax audit. In a context of ecological transition, also consider donation as a responsible alternative to destruction.

(Official sources: French Chart of Accounts, ANC regulation 2014-03 as consolidated at 1 January 2026, and ANC regulation 2022-06 of 4 November 2022; BOFiP BOI-BIC-CHG-60-20-10 on asset losses; CGI art. 257, II-1-1°, art. 238 bis and art. 207 of Annex II; Book of Tax Procedures art. L102 B; French Environmental Code on WEEE and recycling)