Property Valuation
Depreciation in the cost approach is defined as:
AA tax deduction taken on investment property
BA loss in value from any cause — physical deterioration, functional obsolescence, or external obsolescence✓ Correct
CThe decline in property value due to rising interest rates
DThe portion of the purchase price allocated to the land
Explanation
In appraisal, depreciation (accrued depreciation) is the total loss in value of improvements from all causes: physical deterioration, functional obsolescence, and external (economic) obsolescence.
Related Indiana Property Valuation Questions
- An Indiana appraiser determines a property's 'as improved' value versus 'as if vacant' value. The difference represents the:
- The principle of substitution states that a buyer will pay no more than:
- An Indiana appraiser finding that a comparable sale was a foreclosure should typically:
- In Indiana, the economic base theory suggests that real estate values in a community are linked to:
- An Indiana appraiser must be independent from the parties to a transaction. This means:
- The 'principle of substitution' in appraisal states that:
- Indiana's Assessment Ratio Study (ARS) measures:
- The income capitalization approach is most appropriate for valuing:
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