Writing off a worthless stock. Kay Bell @taxtweet . March 11, 2015 in Taxes. Although it may not seem so in volatile markets, investing in stocks is a sound, long-term way to build wealth. It also Sections below further define, explain, and illustrate write off in context with related terms and concepts from financial accounting and finance, focusing on three themes: First, the accounting definitions of Write-Off and Write-Down. Second, example transactions that show how Accountants write off bad debt and other losses. Under par value method, the common stock is debited and treasury stock is credited with the par value of shares to be retired. The journal entry for the retirement of treasury stock under par value method looks like the following: Consider the following example for a better explanation of the retirement of treasury stock under two methods. Example: