To my beloved daughters Loreta, Justina and their husbands Freddy and David,
with love,
Object identification by wear-theoretical mathematical and empirical methods of depreciation
According to the replacement value method of depreciation has another task. Here, it must first include the impairment that results from the fact that the building is aging and wear. This reduction in value for the various depreciation methods. They are summarized in two groups: theoretical - mathematical and empirical methods of depreciation.
According to the theoretical - mathematical methods of depreciation is based on technical progress. Empirical methods, however, relies on comparable ages in general real estate purchase price surveys. It mixes the technical and economic value of the loss factors. Therefore, they can not be strictly characterized as technical methods of depreciation.
Theory -mathematical methods of depreciation
Theory - the mathematical methods of depreciation as a classic. These include straight-line depreciation, amortization Ross Progressive, parabolic depreciation.
Straight line depreciation of the building replacement value equal annual amounts over the normal useful life completely lost. Straight line depreciation wear and tear of normal life expectancy of the building - 100 years, and building age - 25 years is 25%.This depreciation method is generally suitable for buildings with expensive interior decoration and engineering equipment (eg, single family homes), buildings that have high depreciation (factories, workshops), and buildings that are neglected and uncared for.
Meanwhile, Ross progressive depreciation is 15.625% of the building value. Ross depreciation method can be used for residential and business buildings (offices, office buildings, retail stores) with a simple installation and maintenance of good construction.
Parabolic case, depreciation is reported much stronger progression, and depreciation at the end of the normal duration of use of 100%. Individual parabolic depreciation value can be calculated. Thus, the subject of valuation, depreciation of the normal lifespan of 100 years, and building age 25 years. Property depreciation is 6.25%. Parabolic depreciation for buildings with low-value interior decoration and engineering equipment and average requirements (warehouses, container, some industrial buildings, for which there are no special requirements for agricultural buildings under the age of the buildings in good condition).
Empirical methods of depreciation
Contain the following depreciation formula:Cubic depreciation according to Schindler:Valid only when the normal lifespan of 100 years ago. Then the object is equal to the depreciation,where x = 25 years: Depreciation value is 35.625%Parabolic depreciation according to Schindler:Valid only when the normal lifespan of 100 years ago. Property depreciation is equal to when x = 25 years: Depreciation value is 30.625%Depreciation according to Vogels:
Property depreciation is equal to when x = 25 years: Depreciation value is32.5% When you observe the subject of valuation depreciation rate ranges from 6.25% to 35.625%. It depends on the method of calculation and apply the same characteristics of the object. The following table shows the dependence of the replacement value of the object from the depreciation methods.Table 1. Object replacement value of the theoretical, mathematical and empirical methods of depreciation
Depreciation Methods
|
Depreciation
|
|
Theory - the mathematical
|
Rectilinear |
25 %
|
Progressive depreciation Ross
|
15,625 %
|
|
Parabolic depreciation
|
6,25 %
|
|
Empirical
|
Cubic depreciation according to Schindler
|
35,625 %
|
Parabolic depreciation according to Schindler
|
30,625 %
|
|
Depreciation according to Vogels
|
32,5
|
|
* Object restoration costs calculated in accordance with the compulsory registration of property to evaluate the decision on compulsory registration of immovable and movable assets of the average market price-fixing in 2003. November 1st. "in 2003. October 24th. No. 5, when the subject of an administrative purpose room one-storey office, brick, or composite, non-residential buildings. The new building, as measured object, 1 m3 of average construction value (LTL) - 457 LTL/m3. Apartment volume - 155.6 m3. Then the cost of reconstruction of the object: 457 * 155.6 = 71,110 LTL;
