PDSnet Glossary

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Definition

An asset which is steadily losing value. Almost all assets, with the exception of land, are slowly losing value and have to be depreciated in the books of account. Another wasting asset is the ore body of a mine which is being steadily removed, processed and sold. For this reason, mining companies are constantly undertaking new explorations and drilling new exploratory cores to increase the size of their remaining reserves and the economic life of the mine. Plant, machinery, vehicles, furniture and fittings all lose value and must be depreciated. Even Buildings can lose value over time although their depreciation rates are far slower. The Income Tax Act (58 of 1962) allows companies to depreciate their assets at specific rates depending on the type of asset. Thus, vehicles used by the company, but not hired out can be depreciated at 15% per annum.

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