Joi

nCAI
IBWI
THASHOKonYouTube&App
RETAI
LMODULE-E
Chapt
er22:VALUATI
ONOFREALPROPERT(
PART-
I)
Whatwewi
llst
udy
?
*
Whati
sdepr
eci
ati
on?
Depr
eci
ati
on:
Depr
eci
ati
onmeansl
ossi
nval
ue.
Abuil
dinglosesval
ueduet odet er
ior
ati
oninit
s
physi
calcondit
ionasaresultofusage(wear&t ear
),
eff
ectofcli
maticcondi
ti
ons, poorstr
uctur
aldesign
orworkmanship.
Anest i
mat eoftheusef ull
if
eofthebuildi
ngis
madeaf t
erwhichitwillbecomeunserviceabl
eand
depreciati
onischargedaccor di
nglysothat
accumul ateddepr
eciationbecomesequalt othe
ori
ginalinvest
mentatt heendofi t
slif
e.Abuil
ding
al
sol osesv al
ueduet oobsolescence.
Thereiscontinualimprov ementi
nconstructi
on
technologyandar chi
tectureandnewbuildings
provi
demor ecomf or
tableliv
ingcondi
ti
onsby
provi
dingbetterameni t
iessuchasmodul arkitchen,
 Joi
nCAI
IBWI
THASHOKonYouTube&App
washbasins,
hotandcol
dwat
er,
gey
ser
,li
ft
,bet
ter
vent
il
ati
on,et
c.
Therearesev
eralmethodstocal
cul
ate
depreci
ati
onbutthef
ollowi
ngtwomethodsar
e
usuall
yadopt
ed:
1-
Str
aightLi
neMet
hod(
SLM)
2-Wr
it
tenDownVal
ue(
WDV)Met
hod
St
rai
ghtLi
neMet
hod(
SLM)
:
Inthismethod,thedepreciat
ionisal
locat
ed
uniforml
yovertheli
feoft hepropert
yandi s
generall
yadoptedfortaxpurposesandpr epar
ing
fi
nancialst
atements.
Theannualdepr
eci
ati
oni
sgi
venby
:
D=(
C-S)
/n
Di
sannualdepr
eci
ati
on,
Cisor
igi
nalcost
,
Sissal
vagev
alue(val
uethatpr
oper
tymayfetchat
t
heendofusefull
if
e),
nisli
feofbui
ldi
ngi
ny ear
s.
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2/3
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