Economic obsolescence can become a significant issue when a company has or is acquiring assets – such as store or restaurant locations – that generate separate identifiable streams of cash flows. This publication discusses factors that typically cause economic obsolescence and the potential impact, including illustrative examples and case studies.
Bob Dylan’s enduring sentiment “The times, they are a changin’” rings true in many ways. For retail or restaurant companies with significant property, plant and equipment (PP&E) assets, changing times can cause economic obsolescence.
The financial implications of this condition are explored in The valuation impact caused by changing times: Why economic obsolescence matters for retail companies.
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