What Is Home Depreciation?

House depreciation is the loss of property value due to physical, functional or economic factors.

Depreciation

Right!

Home depreciation is due to physical, functional, or

building depreciation

House depreciation is a form of gradual recovery of housing investment, that is, the

(1) Construction cost is accounting

(2) The residual value of a house refers to the value of the building materials remaining after demolition and cleaning after the house has lost its use value after a long period of use. The cleaning cost is the cost of labor and equipment paid for the demolition and disposal of the worn-out house. It is included as additional costs for using the house and should be included in the cost. Generally, the residual value after deducting the cleaning cost is the net residual value, referred to as the residual value.

(3) The service life is the physical wear and tear caused by the physical and chemical factors of the house, resulting in tangible wear. The service life of a house under normal wear and tear is called the service life. The useful life is the natural life determined by the structure and quality of the house. Depreciation period is the period during which the value of a house is transferred. It is the socially necessary average service life, or economic life, determined by socio-economic conditions during use. In addition to the useful life, the depreciation period is also subject to

The calculation method of house depreciation expenses is clearly stipulated in the "Provisional Regulations on the Depreciation of Fixed Assets of State-owned Enterprises". The depreciation method for fixed assets such as houses is the average life method, which is the fixed depreciation method. Its calculation formula is:

Consumers can also use the depreciation method to find the approximate value of the old house they purchased when they purchased the old house. The formula is:

Old house price = cost-annual depreciation cost multiplied by the number of years used

Of course, there are many factors to consider when determining the price of a house, such as the location of the house, the building area of the house, and the level and orientation of the building.

The basis for determining depreciation costs is construction cost, residual value, cleaning costs, and depreciation ^[1] . (1) Construction cost is the basis for calculating depreciation expenses. It consists of material consumption, labor compensation, taxes, and profits necessary for construction. It is the purchase price in residential operations. It should only be the purchase price of the house itself, and should not include other costs. Since the service life of a house is as long as several decades or even more than a hundred years, prices have changed a lot during such a long period of time, so it is generally not based on its original cost, and it is reset according to actual conditions. Calculate the monetary expenditure required to build this type of dwelling. (2) The residual value of a house refers to the value of the building materials remaining after demolition and cleaning after the house has lost its use value after long-term use. (3) The cleaning cost is the cost of labor and equipment paid for the demolition and disposal of the worn-out house. It should be included in the cost as an additional cost of using the house. (4) Generally, the residual value after deducting the cleaning cost from the residual value is the net residual value, referred to as the residual value. Because it accounts for a small proportion of the value of the house, and can only be obtained after the house is scrapped, it cannot be compared with the original value.