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 ?
UK tax rules treat fine wine as a 'wasting asset' so any increase in value does not attract capital gains tax
The total income generated by a wasting asset notionally breaks down into two components: return on capital and return of capital.
Briefly, the executors of Lord Howard's estate put forward the argument that they owed no capital gains tax on the proceeds of the sale on the counter-intuitive basis that the painting was technically a 'wasting asset', and therefore not chargeable under the Taxation of Chargeable Gains Act 1992 (the 'Act').
Even worse for Democrats, their current partisan advantage is a wasting asset. The rule is simple: Shutdown good, debt ceiling bad.
"It has become empty and neglected and at the moment it is a wasting asset to the city.
Fine wine investment is often advertised as a 'tax-free investment' due to it being exempt from capital gains tax as it is deemed a wasting asset 'whose predictable life does not exceed more than 50 years' (Section 44(1) Taxation of Chargeable Gains Act 1992).
Two years later, there is no tax revenue coming into the city from this wasting asset, the $310 million that a private sector developer was going to invest in the albatross of a building has been spent elsewhere and, most importantly, none of the estimated 2,200 jobs were created.
As never before, they have now become a wasting asset.
Angela Beech, head of personal tax at accountants Blick Rothenberg, says: "Cars are regarded as a wasting asset, like racehorses, so transactions in them are certainly free of tax.
He insisted that the Algerians "have a wasting asset in the Polisario but seem still unable to free themselves of causes past."
Experience is valuable but can be a "wasting asset" in the rapidly changing conditions of combat.