What are land write-downs?

Land write-downs refer to the accounting practice of reducing the book value of a piece of land when it is sold for less than its appraised or market value. This typically occurs when a property has undergone significant changes or development challenges, leading to a decrease in its valuation. When land is sold below its market value, it reflects the market realities of supply and demand, any liabilities associated with the land, or necessary investment to make it usable.

The process often impacts financial statements—a write-down indicates a loss in value; therefore, it can signify a company's strategy in responding to market conditions, whether for economic revitalization, lowering tax liabilities, or adjusting to changing real estate markets. In summary, since land write-downs specifically pertain to sales below market value, this aligns perfectly with the definition of the term.