
End-of-life definition
Operators need to estimate when in the future their equipment will attain their end-of-life state. Obsolescence is another word for equipment end-of life. Once they reach this stage, equipment replacement often leads to significant budgetary expenditures. In addition, if the operation has a large number of a particular equipment types, they could all reach their end-of life at the same time leading to even greater financial impact. In industry jargon, this is known as the “Tsunami” effect. Operators need to aware and prepared in order to avoid this “wave” of consequences. Managing future cash inflow and outflows happens to be crucial financial exercise in any organization. Therefore, end-of-life management in an important financial accounting exercise. However, estimating end of life this is not always as straightforward as it seems.












