A measure of depreciation of a property
based on the anticipated life of a
structure.
In the economic age-life method,
(traditionally referred to as the age-life
method), an estimate is made of both the
effective age of a building and its
remaining economic life. The effective age
and remaining economic life together
comprise the economic life of the building.
The ratio of the effective age to the
economic life multiplied by the reproduction
cost of the structure is a measure of the
accrued depreciation. The economic age-life
method takes physical deterioration into
account but does not measure loss in value
due to functional and/or external causes.
Accordingly, this approach is often viewed
solely as a rule of thumb or cross check for
more complex methods.
Economic
Age-Life Depreciation Method (MODIFIED)
A modified measure of depreciation of a
property based on the anticipated life of a
structure using the economic age-life
method.
This modified approach breaks down and
measures the depreciation of the physical
components of the building structure based
on two categories:
Physical Deterioration—Curable; and
Physical Deterioration—Incurable:
Short-Lived and Long-Lived.
However, as with economic age-life
depreciation, the modified method does not
take into account either functional and/or
external obsolescence. Consequently,
appraisers normally use this approach only
when it is apparent that the property being
appraised is not affected by such factors;
or when this method is combined with other
techniques that do account for functional
and/or external obsolescence.
Looking to Buy or Sell Luxury
Real Estate In Toronto, North York, Thornhill,
Woodbridge, Vaughan, Richmond Hill, Aurora, King
City and beyond...visit LuxuryBroker.ca
Mortgages247.ca 2011 Apply Online without Blackouts Mortgages247.ca is designed to provide competent and
reliable information regarding the subject matter covered. However it is
provided, free of charge, with the understanding that the authors are not
engaged in rendering legal, financial or other professional advice. Law and
practice often vary from province and province and if legal or other expert
assistance is required, the services of a professional should be sought. The
authors specifically disclaim any liability that is incurred from the use or
application of the contents of this website.
