Sony to shut TV plant in Japan, cut 2,000 jobs. Axe has fallen, what's next

[ymeaga1n]

NJ5 said:

FishyJoe said:
Another big problem is their inventory. I read a report they had around $11 billion of inventory accumulated, which isn't worth that much any more. So at some point they are going to have to take the hit for it and discount the inventory.

Perhaps you can answer this... Is it standard procedure to do a write-down of the inventory's value due to recent currency movements?

 

Basically...yes. When the book value of the inventory no longer matches the market value of the inventory, companies can writeoff. Of course there is criteria that must be met but yes, companies will write-down inventory because they can lower their taxes that way.