economic life - (1) the time period over which an improvement to land will generate revenues in excess of operating expenses; (2) the time period over which an improvement to land will generate revenues in excess of those attributable to the land itself; (3) the time period over which an improvement to land has value in excess of its salvage value; (4) the time period over which an improvement is forecast to produce income at a competitive rate of return.

The economic life of an improvement is usually less than its physical life and forms the basis of the income tax concept of depreciation. See also depreciation.

© 2004 Bella Vista Publishing Company, Inc.  ISBN 0-9718225-0-6

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