Property or items that experience a rapid fall in usefulness, value or competitiveness are characterized as being obsolete. It occurs due to the availability of cheaper and better alternatives or due to a change in customer taste. It is an important component of operating risl, which causes the obsolete item to take a value cut against earnings. this enables the compliance with accounting principles that require inventory to be showcased at a value lower or on par with market value .
Black’s Law Online Dictionary
