Obsolescence is the process of becoming out of dates before the asset physically wears out. Revenue-producing ability may also decline because of obsolescence. For example, major airlines moved from Chicago’s Midway Airport to Chicago-O’Hare International Airport because Midway’s runways were too short for jumbo jets. Similarly, many companies replace their computers long before they originally planed to do so because improvements in new computing technology make the old computers obsolete.
Definition