economic life

Also found in: Encyclopedia.

Economic Life

The time period over which an asset's NPV is maximized. Economic life can be less than absolute physical life for reasons of technological obsolescence, physical deterioration, or product life cycle.

Useful Life

The amount of time, as determined by the IRS, that an asset is expected to be used. The useful life is important in determining taxes assessed on the depreciated value of the asset each year. Theoretically, an asset's useful life is equal to its absolute physical life, but, because the useful life is an estimation, this is not always the case.

economic life

The period of time during which a fixed asset competitively produces a good or service of value. The economic life of an asset may be particularly short in a rapidly changing field such as electronics where new developments often render an asset obsolete shortly after it is purchased. Companies sometimes continue to carry assets with expired economic lives on their balance sheets because they do not wish to penalize their earnings by writing off the assets. See also physical life.

economic life

The period of time during which an improvement has value in excess of its salvage value;the useful life span of an improvement.

References in periodicals archive ?
The goal is to find the point in the assets life cycle or economic life where the cost of replacement is balanced against the expected cost (or consequences) of failure, the accelerating cost to maintain/repair it, and the declining level of service.
This programme seeks to boost female employability among young graduates, raise women's participation in economic life from 25.
For her part, Ghazaryan assured that the Oxfam is keen to continue its support for the community organizations concerned with gender mergence in the political and economic life in Yemen.
An Afghanistan firmly embedded in the economic life of a thriving South and Central Asia will incentivise those interested in peace and reconciliation, according to the statement, which said neighbours and near-neighbours had a major stake in ensuring that Afghanistan developed from a post-conflict society to an active player in the global economy.
After extending lease agreements by necessity, many customers ended up pushing trucks beyond their economic life, he says, but they might also have learned useful information about utilization.
The third term is the present value of the tax savings arising from tax depreciation on this fixed asset from year T+1 until the end of its economic life.
The astonishing and quite unpredictable explosion in Christian numbers in recent years is clearly connected to a widespread sense that the equally extraordinary explosion in the economic life has left many huge questions about personal and social values unanswered," said Archbishop Williams at the end of his Oct.
In sewerage systems, treatment plants generally have an economic life of 20 years and sewers of 60 years.
The noncompete agreement could be close to the end of its useful economic life.
The more important contribution he made is the argument that in economic life, everyone should be treated equally.
The former constrained states from limiting a variety of customary rights of laborers, especially the freedom to move, and the latter denied states access to important domains of social and economic life, most critically the definition of property rights.
He said: "I will be leading an extremely talented and experienced board which is committed to continuing to delivering a major contribution to the economic life of the West Midlands and exceptional value to our members.