Define: Obsolescence

UK Accounting Glossary

Definition: Obsolescence


Quick Summary of Obsolescence


A significant decline in the competitiveness, usefulness, or value of an article or property. Obsolescence occurs generally due to the availability of alternatives that perform better or are cheaper or both, or due to changes in user preferences, requirements, or styles. It is distinct from fall in value (depreciation) due to physical deterioration or normal




What is the dictionary definition of Obsolescence?

Dictionary Definition


1. uncountable The state of being obsolete—no longer in use; gone into disuse; disused or neglected.
2. countable The process of becoming obsolete, outmoded or out of date.


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Full Definition of Obsolescence


A significant decline in the competitiveness, usefulness, or value of an article or property.

Obsolescence occurs generally due to the availability of alternatives that perform better or are cheaper or both, or due to changes in user preferences, requirements, or styles. It is distinct from fall in value (depreciation) due to physical deterioration or normal wear and tear. Obsolescence is a major factor in operating risk and may a require write off of the value of the obsolete item against earnings to comply with the accounting principle of showing inventory at lower of cost or market value.

Insurance companies take obsolescence into account to reduce the amount of claim to be paid on a damaged or destroyed property.


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Obsolescence FAQ's



Cite Term


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https://payrollheaven.com/define/obsolescence/
Modern Language Association (MLA):
Obsolescence. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. November 22, 2019 https://payrollheaven.com/define/obsolescence/.
Chicago Manual of Style (CMS):
Obsolescence. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/obsolescence/ (accessed: November 22, 2019).
American Psychological Association (APA):
Obsolescence. PayrollHeaven.com. Retrieved November 22, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/obsolescence/

Definition Sources


Definitions for Obsolescence are sourced/syndicated from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 30th September 2019.