A latent variable model is a statistical model that relates a set of variables (so-called manifest variables) to a set of latent variables.
DEFINITION of 'Functional Obsolescence'. A reduction in the usefulness or desirability of an object because of an outdated design feature, usually one that cannot be easily changed.The term is commonly used in real estate, but has a wide application.Next Up. reduction in the usefulness or desirability of an object because of an outdated design feature, usually one that cannot be easily changed. The term is commonly used in real estate, but has a wide application. Next Up.
Understanding Obsolescence. Simply stated, inventory or any business asset becomes obsolete when the item is no longer salable or useful. This results in a loss of value to the business holding the item.irst, inventory and assets should be periodically reviewed for obsolescence. Once identified as obsolete, items should be segregated on financial statements with a write-down by debiting an income-statement expense account and crediting a balance sheet contra-asset account such as inventory reserve.