ECONOMIC DEPRECIATION Definition

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ECONOMIC DEPRECIATION is the decline in real estate property value caused by external forces, such as neighborhood blight or adverse development.

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UNLIMITED LIABILITY is full liability for the debt and other obligations of a legal entity. The general partners of a partnership have unlimited liability.

HISTORICAL COST CONVENTION is that assets are recorded at their initial cost and are not subsequently revalued upwards, and liabilities valued at the amount initially received in exchange for the obligation. The relevance of the convention is that figures remain objectively based on verifiable figures, but in times of high inflation historical cost can become a dubious convention to follow.

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