Property Valuation
In the cost approach, what does 'accrued depreciation' represent?
AThe total construction cost of the building
BThe total loss in value of the improvements from all causes since they were built✓ Correct
CThe annual tax depreciation claimed by the owner
DThe remaining economic life of the building
Explanation
Accrued depreciation in appraisal is the total loss in value of improvements (from the current date back to when they were built) from all causes: physical deterioration (wear/tear), functional obsolescence (outdated design), and external obsolescence (negative external factors). Cost approach value = Land Value + (Cost New − Accrued Depreciation).
Related Oregon Property Valuation Questions
- In Oregon, a property's 'assessed value' for property tax purposes may differ significantly from its 'real market value' due to which legislation?
- What does 'highest and best use' mean in the context of Oregon real estate appraisal?
- In Oregon, what is the 'principle of balance' in real estate valuation?
- What is the 'principle of change' in Oregon real estate valuation?
- Which of the following best describes 'functional obsolescence' in real estate appraisal?
- When appraising a single-family home in Portland using the sales comparison approach, an appraiser finds a comparable that is inferior in one feature worth $15,000 to the subject property. The appraiser should:
- What is 'assemblage' versus 'plottage' in Oregon real estate?
- Oregon appraisers following USPAP (Uniform Standards of Professional Appraisal Practice) are required to maintain their appraisal workfiles for a minimum of:
Practice More Oregon Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oregon Quiz →