cabarrus county board of commissioners regular meeting november ...

October 17, 2011 (Regular Meeting)PageSTEP 4.CALCULATE REPLACEMENT COST NEWA. Replacement Cost New is the product of the effective base ratetimes the total adjusted area calculated earlier. In thesample parcel we have;$68.48 x 4,125 EFF AREA = $282,480STEP 5.DETERMINE DEPRECIATION AND PERCENT CONDITION OF THE SUBJECTSTEP 6.DEPRECIATIONA. Depending on the improvement type one of two methods is used.In chapter 11 are the appropriate table and at the end of thischapter, a further discussion of their use.B. The sample parcel is an improvement type 10 with an effectiveage of 9 years and is depreciated 13%.C. To determine the percent condition, subtract the amount ofdepreciation from 1.0. In the sample parcel, the percentcondition equals 1.0 - .13 = 87%.CALCULATE THE DEPRECIATED BUILDING VALUEA. The DEPRECIATED BUILDING VALUE is the Replacement Cost New xthe Percent Condition in the sample parcel.$282,480 x .87 = $245,758 Rounded d to $245,760A. To the Depreciated Building Value is addedthe totalDepreciated OB/XF Value and Land Value.B. In the sample, this is as follows:$245,760 Depreciated Building Value$22,240 Total Depreciated OB/XF Value$300,000 Land value$568,000 Total valueFind the depreciation schedule in the Appendix for the appropriateImprovement Type.For those with improvement types indicating residentialand/or non income use of average, below average and above average quality,locate the proper exterior walltype and then record the annual and initialpercent depreciation eciation rates.DRAFTDepreciation is calculated for each separate stage of the life cycle of animprovement. The tables in the appendix have five ranges of age as columns.These ages are determined differently for each improvement type and may bedifferent for each year.RESIDENTIAL AND/OR NON INCOME PROPERTY depreciation is also determined in thetable by the row on which the exterior wall is contained. To determine thetotal depreciation, you must calculate each age range independently.For example, (assume we are using the following table):DEPRECIATION SCHEDULESEXTERIORWALL TYPEINCREMENTAL AGING PERIODSFrom - To 1-2 3-11 12-19 20-34 35 & over1 - 4 2.00 1.00 1.00 1.00 1.005 - 7 2.00 1.00 1.00 1.00 1.008 -11 2.00 1.00 1.00 1.00 1.0012 -15 2.00 1.00 1.00 1.00 1.0016 -20 2.00 1.00 1.00 1.00 1.0021 -22 2.00 1.00 1.00 1.00 1.0023 -28 2.00 1.00 1.00 1.00 1.00If our improvement were 24 years old, determined by subtracting the EFFECTIVEAGE from the EFFECTIVE REAPPRAISAL YEAR, we find the total depreciation byA-1Page 125