Depreciation Order

  Previous topic Next topic JavaScript is required for the print function  

If property suffers from more that one type of depreciation they should be estimated in the following order:


1.Physical deterioration
2.Functional obsolescence
3.External obsolescence




A house cost $100,000 to build.  It suffers from 30% physical deterioration, 10% functional obsolescence, and 20% external obsolescence.  What is the value of the house by the cost approach to value (ignoring the land).


Cost of house new


Less:  Physical deterioration at 30%




Less:  Functional obsolescence at 10%




Less:  External obsolescence at 20%


Indicated value by the cost approach



Related Topics


Physical deterioration

Functional obsolescence

External obsolescence

Page url: