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Abnormal obsolescence

Updated: Aug 20, 2021

Loss of value of an asset, a piece of capital equipment, or a property due to changes in techniques, tastes, or circumstances that cannot be reasonably foreseen. Equipment may become obsolete because consumers no longer want the goods it produces, or because ‘technical progress in other industries means that intermediate goods it produces are no longer needed. It may become obsolete because new techniques in its own industry allow production with less labour, fuel, or materials, or because it does not c comply with improved health and safety regulations. A property can lose its value as a result of a natural catastrophe in the area, even if the property itself has not been physically damaged.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.