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Caiib With Ashok Retail Module D Chapter 22 - I

This document discusses valuation of real property and methods of calculating depreciation. It explains that depreciation means loss in value as buildings deteriorate over time due to usage, climate conditions, design flaws, or other factors. The straight-line method and written down value method are two common approaches to calculating depreciation, with the straight-line method allocating depreciation evenly over the life of the property.

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folines
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63 views

Caiib With Ashok Retail Module D Chapter 22 - I

This document discusses valuation of real property and methods of calculating depreciation. It explains that depreciation means loss in value as buildings deteriorate over time due to usage, climate conditions, design flaws, or other factors. The straight-line method and written down value method are two common approaches to calculating depreciation, with the straight-line method allocating depreciation evenly over the life of the property.

Uploaded by

folines
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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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.
1/3
2/3
3/3

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