Definition of Legacy asset:
A legacy asset is an asset that has remained on a company's balance sheet for a long period time and has since become obsolete or has lost nearly all of it's initial value. In fact, legacy assets run the risk of becoming a liability for the company holding them, as they may incur storage, repair, or maintenance costs.
An asset that has been in a company for such a long time that it actually has lost its original value, its outdated, obsolete or has lost its productivity; a legacy asset can become a liability if not handled properly.
The term "legacy" literally means something that has existed for a long period of time. The term "legacy asset" has been coined to refer to an asset that is outdated or obsolete. A legacy asset is an asset that has been on the company's books for a long period of time and has generally decreased in value, likely due to obsolescence, to the point where it is now a loss for the company. It is a loss both in the sense that there is no value in selling the asset, but also it may require some expenditures for storage or maintenance as it can take up shelf space, better occupied by current inventory, or it may require annual tune-ups despite being in disuse.
How to use Legacy asset in a sentence?
- Legacy assets often have little to no economic value to the company and will often have been written down for a loss.
- Financial companies may have legacy assets in the form of investments that have lost most or all of their value, or loans that will never be collected.
- A legacy asset is an obsolete asset that has been kept on a firm's books for an extended period of time and runs the risk of becoming a liability.
Meaning of Legacy asset & Legacy asset Definition