International Association of Accessibility Professionals (IAAP) Certified Administrative Professional (CAP) Practice Exam

What are considered wasting assets?

1. Assets that appreciate over time

2. Assets that lose value over time

3. Assets that generate consistent revenue

4. Assets used exclusively for long-term investments

The correct answer is: Assets that lose value over time

Wasting assets refer to resources that inherently experience a decline in value over time due to their consumption or depletion. These assets could include things like minerals, oil reserves, or equipment that wears out with use. The defining characteristic of wasting assets is that they cannot regenerate or maintain their initial value, which aligns with the concept of depreciation. In this context, assets that lose value over time are indeed categorized as wasting assets. This decline can result from physical wear and tear, depletion of natural resources, or obsolescence. On the other hand, assets that appreciate (the first option) tend to increase in value and do not fit the definition of wasting assets. Consistent revenue generation (the third option) does not affect whether an asset is considered a wasting asset, as an asset could generate revenue while still declining in value. Lastly, assets used for long-term investments (the fourth option) may typically appreciate or depreciate based on various factors, but simply being used for long-term investments doesn’t automatically classify them as wasting assets. Therefore, the focus on an asset’s value after usage succinctly identifies the correct categorization.