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ABNORMAL OBSOLESCENCE

Statistics Directorate    
French Equivalent: Obsolescence anormal

Definition:
Abnormal obsolescence is the loss in value of an asset due to a fall in demand for that type of asset that could not have been foreseen when the asset was acquired.

Context:
Abnormal obsolescence may occur because of a new invention or discovery which destroys the market for the asset or because a shift in relative prices makes it uneconomic to continue using the asset.

It is not included in consumption of fixed capital but in “other changes in non-financial asset n.e.c.” in the “Other changes in assets account”.

Abnormal obsolescence is a synonym for “unforeseen obsolescence”.

Source Publication:
Measuring Capital: OECD Manual, Annex 1 Glossary of Technical Terms Used in the Manual, OECD, 2001.

Cross References:
Unforeseen obsolescence – OECD
Unforeseen obsolescence – SNA

Statistical Theme: National accounts

Created on Tuesday, September 25, 2001

Last updated on Thursday, April 24, 2003