Physical Condition Does Not Explain All Asset Obsolescence
Well-maintained equipment can still face a loss of economic usefulness.
Crowe AHFAD | Advisory Department
6/30/2026
Distinguish deterioration, operating inefficiency and external constraints before determining their effect on asset value.
An asset can remain operational while becoming less efficient, less suited to production requirements or affected by weaker demand. Understanding the cause, duration and financial consequences of these conditions helps distinguish physical deterioration from other losses of utility and supports reasoned valuation adjustments without duplicating their effects.