This region of the country experiences cool and wet winters near the coast, is cool and dry inland, and features extreme cold and heavy snows in the mountains. Summer temperatures are cooler and dryer than much of the country.
A single-family residence has an actual age of 15 years, an estimated effective age of 10 years, and a remaining economic life of 30 years. The replacement cost is $83,500. A frame garage was added to the property ten years ago and has an effective age of 10 years with a remaining economic life of 15 years.The replacement cost is $15,500. The accrued depreciation for both main and accessory structures is: Effective age + remaining economic life = economic life of building. 2  Effective age/Economic life x Replacement Cost = Accrued Depreciation. 3  Effective age may or may not reflect actual age, since maintenance, upgrading, design, or other factors may affect the aging process.
For example, you consider the effective age of a house to be 35 years with a total economic life of 65 years. By the age-life method, the depreciation is 53.85 percent (35 years divided by 65 years). If your replacement cost new is $300,000, the depreciation would be $161,550.he formula for the age-life method is the âeffective age divided by the total economic life, times the total replacement cost new of the improvements.â This is the easiest and most often used method to estimate physical deterioration.