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Sunk Costs: Assets with Little or No Market Value

The text book definition of "sunk costs" reads something like this: Sunk Costs: Costs that were incurred in the past that cannot be recovered and thus are irrelevant for decision making. Well most costs are incurred in the past so that part of the definition is not all that helpful. More central is the idea of recoverability. But the key underlying idea, which is not spelled out in the definition, is that sunk costs are assets. Huh? How can costs be assets? Well keep in mind that costs involve the expenditure of resources (usually money).

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