Terotechnology

DEFINITION of 'Terotechnology'

A word derived from the Greek root word "tero" or "I care", that is now used with the term "technology" to refer to the study of the costs associated with an asset throughout its life cycle - from acquisition to disposal. The goals of this approach are to reduce the different costs incurred at the various stages of the asset's life and to develop methods that will help extend the asset's life span.

Terotechnology uses tools such as net present value, internal rate of return and discounted cash flow in an attempt to minimize the costs associated with the asset in the future. These costs can include engineering, maintenance, wages payable to operate the equipment, operating costs and even disposal costs.

Also known as "life-cycle costing".

BREAKING DOWN 'Terotechnology'

For example, let's say an oil company is attempting to map out the costs of an offshore oil platform. They would use terotechnology to map out the exact costs associated with assembly, transportation, maintenance and dismantling of the platform, and finally a calculation of salvage value.

This study is not an exact science: there are many different variables that need to be estimated and approximated. However, a company that does not use this kind of study may be worse off than one that approaches an asset's life cycle in a more ad hoc manner.

RELATED TERMS
  1. Asset Disposal Plan

    A plan that documents the activities and costs associated with ...
  2. Economic Life

    The expected period of time during which an asset is useful to ...
  3. Whole-Life Cost

    The total cost of owning an aset over its entire life. Whole ...
  4. Replacement Cost

    The cost to replace the assets of a company or a property of ...
  5. Original Cost

    The total costs associated with the purchase of an asset. The ...
  6. Asset Condition Assessment

    A report outlining how an organization can manage capital assets ...
Related Articles
  1. Investing

    Explaining Capitalized Cost

    A capitalized cost is an expense associated with a fixed asset that is added to the basis of that asset and expensed over its depreciable life.
  2. Investing

    What Is the Best Age to Get Life Insurance?

    Learn about the optimal time for purchasing personal life insurance and why delaying the buying decision may have costly consequences.
  3. Financial Advisor

    Whole or Term Life Insurance: Which Is Better?

    Learn the difference between term life insurance and whole life insurance. Understand when it is beneficial to buy each type of life insurance.
  4. Personal Finance

    What's Better: Whole Life or Term Insurance?

    Life insurance can be a difficult decision to make, especially for a young adult. Here's a look at the benefits and costs of getting whole life insurance.
  5. Personal Finance

    Understanding Different Types of Life Insurance

    Understand the various types of life insurance, how each can be used in personal or business financial planning, and for whom they are best-suited.
  6. Entrepreneurship & Small Business

    What Are The Different Types Of Costs In Cost Accounting?

    Cost accounting measures several different types of costs associated with a company’s production processes.
  7. Personal Finance

    How To Insure Your Most Important Asset - Yourself

    Insuring your human capital is something often overlooked. Don't make the mistake of leaving your biggest asset unprotected.
  8. Financial Advisor

    Which Life Insurance is Right For You?

    Consumers have choices when it comes to life insurance. Knowing your future needs for cash or retirement can make the difference in what you select.
  9. Investing

    What are Acquisition Costs?

    A company can recognize acquisition costs as those costs used to buy property and equipment.
  10. Investing

    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 is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ... Read Answer >>
  2. What are typical examples of capitalized costs within a company?

    Learn examples of capitalized costs such as expenses incurred to put fixed assets to use as well as software development ... Read Answer >>
  3. Which consumer goods do Americans buy the most of?

    Explore the various factors that influence estimations of a tangible asset's useful life, as well as standard estimations ... Read Answer >>
  4. Why do companies often treat events such as the purchase of an asset or construction ...

    Understand the capitalized costs of fixed assets and learn how they are reflected on a company's balance sheet and income ... Read Answer >>
  5. How are fixed costs treated in cost accounting?

    Learn how fixed costs and variable costs are used in cost accounting to help a company's management in budgeting and controlling ... Read Answer >>
  6. What are the different ways to calculate depreciation for tangible assets?

    Learn what depreciation is and how to calculate it using the straight line method, declining balance method, and the sum-of-the ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center