Definition: Decay

Category: National accounts

Decay is the loss in the physical efficiency of an asset as it ages. Efficiency in this context refers to the asset’s ability to produce a quantity of capital services for a given of labour or materials.
Organisation for Economic Co-operation and Development (OECD), "Measuring Capital - OECD Manual: Measurement of Capital Stocks, Consumption of Fixed Capital and Capital Services", Annex 1: Glossary of technical terms used in the Manual, Paris, 2001