Property Valuation
Accrued depreciation in the cost approach refers to:
AThe annual depreciation deduction allowed by the IRS
BThe total loss in value from all causes as of the appraisal date✓ Correct
CThe accumulation of deferred maintenance costs
DThe increase in value above construction cost
Explanation
Accrued depreciation is the total loss in value from all sources (physical deterioration, functional obsolescence, and external obsolescence) measured from new to the appraisal date.
Related Nebraska Property Valuation Questions
- Reproduction cost in the cost approach is the cost to:
- External obsolescence (economic obsolescence) in an appraisal is caused by:
- The principle of substitution in appraisal theory states that:
- Gross Rent Multiplier (GRM) is calculated as:
- Highest and best use of a property is defined as the use that is:
- The principle of conformity holds that a property achieves maximum value when:
- External (economic) obsolescence is a form of depreciation caused by:
- Capitalization rate (cap rate) is calculated as:
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