Investopedia

Wasting Asset

Filed Under » ,
Dictionary Says

Definition of 'Wasting Asset'

An item that irreversibly declines in value, as a function of time. Wasting assets include vehicles, machinery and other fixed assets. Accountants attempt to quantify the amount that assets decrease in value over time, by assigning depreciation schedules to wasting assets, therefore, recognizing the decrease in value each year.
Investopedia Says

Investopedia explains 'Wasting Asset'

In investing, options are the most common type of wasting asset. An option's value has two components: a time value and an intrinsic value. As the option's expiration date nears, the time value of the option gradually declines to zero. At expiration, an option is worth only its intrinsic value. Nonetheless, wasting assets are usually of a physical nature and experience price erosions as time passes.

Articles Of Interest

  1. The Importance Of Time Value In Options Trading

    Move beyond simply buying calls and puts, and learn how to turn time-value decay into potential profits.
  2. Options Basics Tutorial

    Discover the world of options, from primary concepts to how options work and why you might use them.
  3. Arbitrage Squeezes Profit From Market Inefficiency

    This influential strategy capitalizes on the relationship between price and liquidity.
  4. Making It Big On Wall Street

    Read about some of the most glamorous Wall Street jobs and what it takes to land one.
  5. Quants: The Rocket Scientists Of Wall Street

    Blend math, finance and computer skills to command a high - and well deserved - salary.
  6. Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  7. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.
  8. Build A Baby Berkshire

    Get a piece of Warren Buffett's profit by using Form 13F to coattail his picks.
  9. Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
  10. Cash: A Call Option With No Expiration Date

    Cash is generally regarded as a drag on investment returns, but sometimes it may be preferable to hold a substantial cash amount instead of investing it in other assets. This is because having ...
comments powered by Disqus
Marketplace
Hot Definitions
  1. Abatement Cost

    A cost borne by many businesses for the removal and/or reduction of an undesirable item that they have created.
  2. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.
  3. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.
  4. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.
  5. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.
  6. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.
Trading Center