Legacy Asset

DEFINITION of 'Legacy Asset'

An asset that has been on the company's books for a long period of time. This type of asset has generally decreased in value to the point of a loss for the company. The term comes from the literal meaning of outdate or obsolete.

BREAKING DOWN 'Legacy Asset'

While these assets are generally considered a hinderance, it may be a good time to take another look at them in times of economic downturn. It is possible that they may have new value in a different time or economy. Conversely, it may also be a good time to sell the assets at a reduced price, simply to earn enough money to remain afloat during a recession.

RELATED TERMS
  1. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
  2. Carrying Value

    An accounting measure of value, where the value of an asset or ...
  3. Absolute Physical Life

    The length of time that it takes for an asset takes to become ...
  4. Permanent Current Asset

    The minimum amount of current assets a company needs to continue ...
  5. Appreciation

    An increase in the value of an asset over time. The increase ...
  6. Long-Term Assets

    1. The value of a company's property, equipment and other capital ...
Related Articles
  1. Markets

    Book Value: How Reliable Is It For Investors?

    In theory, a low P/B ratio means you have a cushion against poor performance. In practice, it is much less certain.
  2. Fundamental Analysis

    The Market Value Versus Book Value

    Understanding the difference between book value and market value is a simple yet fundamentally critical component to analyze a company for investment.
  3. Savings

    Assessing Bank Assets: Are Your Savings Safe?

    Learn how to determine if your assets are safe or if your bank has spread itself too thin.
  4. Investing Basics

    What's an Asset?

    An asset is a resource with economic value.
  5. Investing Basics

    What is a Real Asset?

    A real asset is a physical asset that has value.
  6. Economics

    Understanding Impairment

    In finance and accounting, impairment refers to the loss of value of a company’s capital stock.
  7. Markets

    Investment Valuation Ratios: Price/Book Value Ratio

    By Richard Loth (Contact | Biography)A valuation ratio used by investors which compares a stock's per-share price (market value) to its book value (shareholders' equity). The price-to-book value ...
  8. Investing Basics

    Explaining Financial Assets

    A financial asset is intangible property that represents a claim on ownership of an entity or contractual rights to future payments.
  9. Economics

    Understanding Carrying Value

    Carrying value is the value of an asset as listed on a company’s balance sheet. Carrying value is the same as book value.
  10. Economics

    Calculating Net Realizable Value

    An asset’s net realizable value is the amount a company should expect to receive once it sells or disposes of that asset, minus costs from its disposal.
RELATED FAQS
  1. What's the difference between book and market value?

    Book value is the price paid for a particular asset. This price never changes so long as you own the asset. On the other ... Read Answer >>
  2. Are stocks real assets?

    Learn why stocks are classified as financial assets, not real assets. Understand the properties that determine whether an ... Read Answer >>
  3. What is the difference between book value and carrying value

    Dig deeper into the definitions of carrying value and book value, and learn to differentiate between their various financial ... Read Answer >>
  4. Are current assets liquid or capital?

    Take a deeper look at liquid current assets for businesses and individuals, and learn how they differ from other types of ... Read Answer >>
  5. Why is market to market (MTM) accounting considered controversial?

    Understand why mark to market accounting has been a major point of controversy because it requires all assets to be valued ... Read Answer >>
  6. What is the difference between a company's book value per share and its intrinsic ...

    Book value and intrinsic value are two ways to measure the value of a company.In simple terms, book value is based on the ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center