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The intention of such methods of calculation is not to determine the depreciation value for accounting or tax purposes.
It is used for estimating the current value of improvements made to the house which will be indicated in the appraisal report.
Because there are 3 primary types of property depreciation namely:
- Physical depreciation
- Functional obsolescence
- Economic obsolescence
Using the breakdown method is preferred for appraisers to make a more accurate judgement of how much depreciation would actually affect the value of property.