Obsolescence:
A) Occurs when an asset is at the end of its useful life.
B) Refers to an item of property, plant and equipment that is no longer useful in producing goods and services with a competitive advantage.
C) Refers to the insufficient capacity of a company's property, plant and equipment to meet the company's productive demands.
D) Occurs when an asset's residual value is less than its replacement cost.
E) Does not affect property, plant and equipment.

Question

Quizplus · Accepted Answer

Obsolescence refers to the situation where an asset, particularly in the context of property, plant, and equipment, becomes outdated or no longer competitive in producing goods and services, not necessarily because it has physically deteriorated or reached the end of its useful life, but because newer, more efficient technologies have made it less desirable or useful.