wasting asset


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Wasting asset

An asset that has a limited life and thus decreases in value (depreciates) over time. Also applies to consumed assets, such as oil or gas, and termed "depletion."

Wasting Asset

An asset, especially a derivative, that loses value over time. A primary example is an out of the money option, which declines in value close to the expiry date because it becomes less likely that the option will become in the money. It can also apply to assets that are consumed, such as oil or food products. In this situation, the asset reaches its highest value at its sale, and then rapidly depreciates. In accounting, a wasting asset is anything subject to depreciation. See also: Absolute physical life.

wasting asset

An asset that tends to decline in value over time as its expected life is used up. A factory machine or an automobile is a wasting asset. Some individuals also consider options or warrants wasting assets because they have a limited life after which they are valueless. Also called shrinking asset.

wasting asset

FIXED ASSETS such as mines, quarries and oil wells, which are used up during their working lives. It is especially important to make adequate provision for DEPRECIATION of such assets.

wasting asset

any NATURAL RESOURCE, such as coal and oil, that has a finite but indeterminate life span depending upon the rate of depletion. See ASSET.

wasting asset

An asset that is depleted or used up over time,such as oil and gas,minerals under the earth,or timberland.Wasting assets may give rise to income tax depletion deductions,similar to the better-known depreciation deductions.

References in periodicals archive ?
The courses are becoming a wasting asset for lack of capital expenditure.
This occurred despite the fact that the Company has spent over $5 billion in total capital expenditures (including acquisitions) during this time period, causing Credit Suisse to announce in its June 28, 2007, research report that 'there is little doubt in our minds that Dillard's is a wasting asset.
Cars can be a wasting asset in that they just lose their value but some depreciate quicker than others and it is important to take this into consideration when you are buying a car.
A wasting asset with BIG, however, merely has a FMV that exceeds its basis in the pre-change period; it does not have a fixed right to income taken into account in the post-change period.
6067-97 (a case primarily involving a wasting asset, goodwill), and FPL Group, Inc.
They represent a wasting asset because the longer they are left lying empty the more they deteriorate.
McConnell believes goodwill is a wasting asset because it has a definite life.
For the Israelis, South Lebanon was a wasting asset that Damascus could use to harry them.
A parked truck is the most expensive wasting asset you can have.
He tried to explain and measure the value of a wasting asset using the yields on debt and equity claims on the asset.
The Middle East's oil-producing countries are especially obliged to heed the Gulf Research Center's study because their economies are based on a wasting asset, oil, whose depletion will leave them with little more than sand if the payment they receive is substantially depreciated or defaulted upon.
We believe that, with the proper tax planning and structuring of a transaction, the Company's sizable NOLs would hold significant value for an acquiring company, whereas they are currently a wasting asset losing value each year.