Depreciation Percentages and Dollar Amounts
When you select depreciation method 4 (Entered Percentages or Dollars), you
can enter a percentage in either of the following fields (but not both):
- Physical Depreciation: The loss in value due to physical deterioration.
- Physical and Functional Depreciation: The loss in value due to physical deterioration, combined with the typical
loss in value due to lack of utility or desirability of part or all of the
property, inherent to the improvement or equipment.
The percentage entered applies to all depreciable components that are not
individually depreciated. In addition, you can enter a dollar amount for either of
these depreciation types. This dollar amount is added to any other
depreciation calculated based on the percentage entered (or calculated for individual
components).
In addition, the following fields are available for all depreciation methods:
- Functional Depreciation: The loss in value due to lack of utility or desirability of part or all of
the property, inherent to the improvement or equipment. Thus, a new structure
may suffer obsolescence when built. Also called technical obsolescence. If you
have entered a percentage or dollar amount for physical+functional depreciation
(or are using one of the automatically calculated physical+functional
percentages), you can use this field for additional functional depreciation.
- External Depreciaton: The loss in value due to causes outside the property and independent of it.
Also called locational or economic obsolescence.