Depreciated Replacement Cost

Question 1

When to use?

Answer 1

Only where no direct market evidence is available or on specialised properties

Question 2

Methodology

Answer 2

Value of land in its existing use plus current cost of replacing the building plus fees less a discount for depreciation and deterioration

Question 3

Three types is obsolescence deductions

Answer 3

Physical - wear and tear
Functional - design of the asset no longer fulfils the requirement
Economic - changing market conditions