Age depreciation
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Back to "Valuation"The age depreciation designates the reduction of the value of a thing during its life span and/or total service life due to wear, wear, consumption or due to aging procedures.
Since the actual age depreciation often cannot be determined exactly, one makes do for the purposes of the valuation with different approximation methods.
Depending upon the applied procedure still another residual value remains at the end of the life span.
Procedure
In the following formulas the following designations are used:
- A is the age of the thing
- G is the total use duration or life span
- w is the age depreciation in %
Linear age depreciation
With this procedure one assumes first that the value of a thing is present to 100% with the emergence and decreases evenly then in the process of the life span.
Formula w= {A \ over G} \ times 100Age depreciation after Ross
The procedure is used particularly in the real estate economy with valuations.
Formula w= {1 \ over 2} \ times \ left ({\ ({A \ over G} \ right) ^2+ left {A \ over G}} \ right) \ times 100depreciation
With this procedure the age depreciation has a process.
Formula w= \ left ({A \ over G} \ right) ^2 \ times 100After age depreciation bird
This procedure is based on empirical investigations of purchase prices. At the end of the total service life here still another residual value of 20% is present.
Formula w= \ left ({- 0.4 \ times \ ({A \ over G} \ right) ^2+1,2 left \ times {A \ over G}} \ right) \ times 100Related links
see also: Portal: Architecture and building industry
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A» Account of heating costs» Additional expenses » Age depreciation » Age value factors » All Risk Yield » Assessment of company value » Asset value method » Average value method |
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For this reason, the effective age based depreciation is assumed to be for a structure of average condition. This average percent depreciation is further ...
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