Question

Obsolescence of a depreciable asset may be caused by
I. Technological changes
II. Improvement in the production method
III. Legal or other restrictions

• A. Only (I)
• B. Both (I) and (II)
• C. All (I), (II), (III)
• D. Only (III)

Answer 1

The correct option is C All (I), (II), (III)

Obsolescence means the fact of being "out - of - date". It implies an existing asset becoming out of date on account of the availability of a better type of asset. It can be due to any factor: -

1) Technological Changes
2) Improvements in production methods

3) Change in market demand
4) Legal or other restrictions.