Production When we sell capacity, what is written off?

Capacity is sold at 65% of the original value of the equipment. If the net equipment value after depreciation is less than 65% of the original value, you make money on the sale. If greater than 65%, you lost money on the sale. The gain or loss is reported on your income statement as a write-off. If you see a negative write-off on the income statement, that means a negative expense (i.e., income). A positive value for a write-off is simply an ordinary expense.

If you sell all of the capacity, the simulation will discontinue the product line and liquidate any remaining inventory at 50% of the cost of production. You see half the value of your inventory converted to cash, and half is expensed as a write-off on your Income Statement.