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  • Wasting Assets

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    Jann Vic Sales
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    A wasting asset is an asset that loses value over time through use, such as vehicles, machinery, mines, and quarries. Options contracts also lose their time value as they approach expiration. Assets classified as wasting may be treated differently for tax purposes by applying depreciation to account for the loss in value. Current assets include stocks, prepaid expenses, bills receivable, cash, and accrued incomes, while liquid assets also include short-term loans, advances, and investments that can be converted to cash. Absolute liquid assets are the most easily convertible to cash, such as cash in hand and at banks.

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    A wasting asset is an asset that loses value over time through use, such as vehicles, machinery, mines, and quarries. Options contracts also lose their time value as they approach expiration. Assets classified as wasting may be treated differently for tax purposes by applying depreciation to account for the loss in value. Current assets include stocks, prepaid expenses, bills receivable, cash, and accrued incomes, while liquid assets also include short-term loans, advances, and investments that can be converted to cash. Absolute liquid assets are the most easily convertible to cash, such as cash in hand and at banks.

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    16 views2 pages

    Wasting Assets

    Uploaded by

    Jann Vic Sales
    A wasting asset is an asset that loses value over time through use, such as vehicles, machinery, mines, and quarries. Options contracts also lose their time value as they approach expiration. Assets classified as wasting may be treated differently for tax purposes by applying depreciation to account for the loss in value. Current assets include stocks, prepaid expenses, bills receivable, cash, and accrued incomes, while liquid assets also include short-term loans, advances, and investments that can be converted to cash. Absolute liquid assets are the most easily convertible to cash, such as cash in hand and at banks.

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    © All Rights Reserved
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    Wasting asset

    A wasting asset is an asset that irreversibly declines in value over time. This could include

    vehicles and machinery, and in financial markets, options contracts which continually lose time

    value after purchase.[14] Mines and quarries in use are wasting assets.[15] An asset classified as

    wasting may be treated differently for tax and other purposes than one that does not lose value;

    this may be accounted for by applying depreciation.

    Comparison: current assets, liquid assets and absolute liquid assets

    Current assets Liquid assets Absolute liquid assets

    Stocks

    Prepaid expenses

    Bills receivable Bills receivable

    Cash in hand Cash in hand Cash in hand

    Cash at bank Cash at bank Cash at bank

    Accrued incomes Accrued incomes Accrued incomes

    Loans and advances (short Loans and advances (short Loans and advances (short

    term) term) term)


    Trade investments (short Trade investments (short Trade investments (short

    term) term) term)

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