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Business Studies

Economic Environment

Obsolescence ...

Question

Obsolescence means decline in the value due to _________.

A

Fall in the market price

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B

Physical wear and tear

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C

Innovations and inventions

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D

Efflux of time

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Solution

The correct option is D Innovations and inventions
When there is new innovation and inventions in the market, the existing product may lose its value. Such decline in the value of the product is known as obsolescence.
Obsolescence occurs generally due to the availability of the alternatives that perform better.

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Similar questions

Q. Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from -
I. Use
II. Efflux of time
III. Obsolescence through technology and market changes
Select the correct answer from the options given below:

Q. Match List-I with List-II and select the correct answer using the codes given the lists.

List-I	List-II
I. Amortisation	(a) Diminition in the life of the assets due to excessive use
II. Depreciation	(b) Exhaustion of natural resource
III. Depletion	(c) Expiration of tangible assets
IV. Obsolescence	(d) Expiration of intangible assets
	(e) Economic deterioration due to improved inventions

Q. _______ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time of obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined.

Q. __________ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined."

Q. A decrease in value of fixed asset due to age, wear and tear ___________.

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