Definition: Obsolescence
OECD terminology
"Measuring Capital Manual 2009"
Loss in value of existing capital because it is no longer technologically suited to economic conditions or because technically superior alternatives become available. Obsolescence is typically described as a value phenomenon, not one that affects the physical services provided by a capital good. However, obsolescence can affect an asset’s economic service life and hence the total volume of capital services it delivers.
"Measuring Capital Manual 2001"
Obsolescence is the loss in value of an old asset because a newly introduced asset of the same class contains improvements in productiveness or efficiency or suitability in production.
Source:
Organization for Economic Cooperation and Development (OECD), "Measuring Capital Manual, Second Edition", OECD, Paris, 2009
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