One reason for an asset's limited useful life is physical deterioration.

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Physical deterioration is a common reason why assets have limited useful lives. Over time, assets such as buildings and equipment may experience wear and tear, damage, or obsolescence, which can reduce their efficiency, capacity, or functionality. As a result, companies need to periodically evaluate and depreciate their assets to reflect their decreasing value and potential replacement or repair costs. Other reasons for limited asset life may include technological changes, market shifts, legal requirements, or environmental factors.

One Reason for an Asset's Limited Useful Life Is Physical