Allowance for depreciation refers to the reduction in the book value of a fixed asset due to wear and tear, age, or obsolescence. It is an accounting term that allows businesses to allocate the cost of an asset over its useful life.
Creative destruction is a free-market concept popularized by economist Joseph Schumpeter that holds economic progress results from entrepreneurial innovation, inevitably leading to the destruction of established businesses that become obsolete.
Current Replacement Cost refers to the expense involved in replacing an asset or the services it provides, calculated at the balance-sheet date. Determining this cost can be challenging, especially if the asset is obsolete.
Functional obsolescence refers to the decline in a property's value due to changes in design, style, or technology that make the property less desirable in the eyes of buyers or tenants.
Market value is the price a willing buyer would pay for property purchased from a willing seller, while actual cash value is the replacement cost of damaged or destroyed property minus depreciation and obsolescence.
Obsolescence refers to the decline in the value of an asset due to its age or reduced usefulness caused by technological advancements or market changes.
The period over which a product or fixed asset will need to be replaced owing to obsolescence.
A wasting asset is an asset that has a finite life span and steadily declines in value over time, typically due to physical wear and tear or obsolescence.
