wasting asset

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.