Economic losses from physical deterioration of the building. External (economic) deterioration of property complexes of industrial enterprises. Calculation methods (2). Methods for calculating external wear

Metals and metal products 14.11.2020

Metals and metal products

Depreciation is characterized by a decrease in the usefulness of a property, its consumer attractiveness from the point of view of a potential investor and is expressed in a decrease in value over time (depreciation) under the influence of various factors. As the facility is operated, the parameters that characterize the structural reliability of buildings and structures, as well as their functional compliance with current and even more future use associated with human life, gradually deteriorate. In addition, the value of real estate is also influenced by external factors due to changes in the market environment, the imposition of restrictions on certain uses of buildings, and so on.

Depreciation (I) is usually measured as a percentage, and the depreciation value is impairment (O).

Depending on the reasons causing the depreciation of the property, the following types of depreciation are distinguished: physical, functional and external (Fig).

Physical and functional wear is subdivided into removable and irreparable.

Removable wear is wear, the elimination of which is physically possible and economically feasible, that is, the costs incurred to eliminate this or that type of wear contribute to an increase in the value of the object as a whole.

Identification of all possible types of depreciation is the accumulated depreciation of the property. In value terms, cumulative depreciation is the difference between the replacement cost and market price of the evaluated object.

The cumulative accumulated depreciation is a function of the object's lifetime. Let's consider the basic evaluative concepts that characterize this indicator.

Physical life of a building (FZH) - the period of operation of a building, during which the state of the load-bearing structural elements of the building meets certain criteria (structural reliability, physical durability, etc.). The term of the physical life of an object is laid down during construction and depends on the capital group of buildings. Physical life ends when the object is demolished.

Chronological age (XB) is the period of time that has elapsed from the day the object was put into operation until the date of assessment.

The effective age (EE) is calculated based on the chronological age of the building, taking into account its technical condition and prevailing at the date of assessment of economic factors affecting the value of the appraised object.

Economic life (EL) is determined by the operating time during which the object generates income. During this period, ongoing improvements contribute to the value of the property. The economic life of an object ends when the operation of the object cannot generate income indicated by the corresponding rate for comparable objects in this segment of the real estate market. At the same time, the ongoing improvements no longer contribute to the value of the object due to its general wear and tear.

The remaining economic life (OSER) of a building is the period of time from the date of assessment to the end of its economic life (Fig.).

Physical deterioration is a gradual loss of the technical and operational qualities of an object originally laid down during construction under the influence of natural and climatic factors, as well as human life.

Calculation methods physical wear and tear buildings are as follows:

· Method of technical expertise;

· Cost;

· Lifetime method.

Technical expertise method for calculating physical wear and tear involves the use of various regulatory instructions at the intersectoral or departmental level. An example is the Rules for Assessing the Physical Deterioration of Residential Buildings (VSN 53-86) of the State Committee for Civil Engineering and Architecture under the USSR Gosstroy. - M., 1990, used by the BTI in order to assess the physical wear and tear of residential buildings during technical inventory, planning overhaul housing stock regardless of its departmental affiliation.

These rules provide a characteristic of the physical wear and tear of various structural elements of buildings and their assessment.

The physical deterioration of the building should be determined by the formula:

where F f - physical deterioration of the building,%;

F i - physical wear of the i-th structural element,%;

L i - coefficient corresponding to the share of the replacement cost of the i-th structural element in the total replacement cost of the building;

n is the number of structural elements in the building.

The shares of the replacement cost of individual structures, elements and systems in the total replacement cost of a building (in percent) are usually taken according to the enlarged indicators of the replacement cost of residential buildings, approved in the prescribed manner, and for structures, elements and systems that do not have approved indicators, according to their estimated cost.

The sequence of the method implementation:

1. A visual inspection and instrumental-full-scale inspection of structural elements and engineering systems of the evaluated building are carried out.

2. During the examination, signs of physical wear and tear are revealed and their quantitative characteristics are established:

Number of damaged areas

Determination of the size of damage - area, length or depth.

3. Comparison of the detected indicators of damaged areas with their quantitative values given in the corresponding tables of the standard. (VSN 53-86)

4. Filling in the appropriate tables for calculating physical depreciation.

The described technique is used exclusively in domestic practice. For all its clarity and persuasiveness, the following disadvantages are inherent in it:

· Due to its “normative nature”, it initially cannot take into account the atypical operating conditions of the facility;

· Labor intensity of application due to the necessary detailing of the structural elements of the building;

· Impossibility of measuring functional and external wear;

· Subjectivity of specific weighting of structural elements.

At the heart of cost method for determining physical wear and tear lies physical wear, expressed at the time of its assessment by the ratio of its cost to objectively necessary repair measures that eliminate damage to structures, an element, a system or a building as a whole, and their replacement cost.

The essence of the cost method for determining physical wear and tear is to determine the cost of recreating the elements of the building.

This method allows you to immediately calculate the wear of elements and the building as a whole in value terms. Since the impairment is calculated based on the reasonable actual costs of bringing the worn out elements to “practically new condition”, the result of this approach can be reasonably accurate. The disadvantages of the method are the mandatory detailing and the accuracy of calculating the costs of repairing worn-out building elements.

Determination of physical deterioration of buildings lifetime method... Indicators of physical wear and tear, effective age and economic life are in a certain ratio, which can be expressed by the formula

I = (EV: VF) * 100 = [EV: (EV + OSFJ)] * 100,

where And - wear,%;

EV - effective age, determined by an expert on the basis of the technical condition of the elements or the building as a whole;

VF - typical length of physical life;

OSFL - Physical Life Remaining.

И = (ХВ: ФЖ) * 100,

where And - wear,%;

ХВ - chronological age.

The percentage of depreciation of elements or the building as a whole calculated in this way can be converted into value (impairment):

O = BC * (I: 100),

where And - wear,%;

ВС - replacement cost.

Functional wear. Signs of functional wear in the assessed building - non-compliance of the space-planning and / or structural solution with modern standards, including various equipment necessary for the normal operation of the structure in accordance with its current or intended use.

Functional wear is also subdivided into disposable and irreparable.

Removable functional wear is determined by the cost of the necessary reconstruction, contributing to a more efficient operation of the property.

Correctable functional wear is measured by the cost of correcting it and is caused by:

disadvantages requiring the addition of elements;
shortcomings requiring replacement or modernization of elements;
"Super-improvements".

Capitalization method for rent losses
Excess operating cost capitalization method

External (economic) wear- depreciation of the object, due to the negative influence of the external environment in relation to the object of assessment: the market situation, easements imposed on certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc. External depreciation of real estate, depending on the causes that caused it, in most cases is irreparable due to the unchanged location, but in some cases it can “eliminate itself” due to a positive change in the surrounding market environment.

Methods for determining functional wear:

the method of capitalizing the loss of income attributable to external influences;
a method of comparing sales of similar objects with and without external influences.

Disadvantages of the cost approach:

1. Costs are not always equivalent to market value.

2. Attempts to achieve a more accurate assessment result are accompanied by rapid growth labor costs.

3. Inconsistency between the acquisition costs of the property being evaluated and the costs of new construction of exactly the same property, since during the valuation process, accumulated depreciation is deducted from the cost of construction.

4. Problems in calculating the cost of reproduction of old buildings.

5. The difficulty of determining the amount of accumulated wear and tear of old buildings and structures.

6. Does not reflect the investor's profit.

Federal Agency for Education of the Russian Federation

State educational institution

higher professional education

Izhevsk State Technical University

Votkinsk branch

Department "E and OP"

DP faculty

TEST

By discipline: "Economics of Real Estate"

on the topic: "Determination of the depreciation of a property"

Completed: Art. gr. VZ 7-21-2 (5.6) Seletkova V.V.

Checked by: L. L. Fedorova

Votkinsk

Determination of depreciation is necessary in order to take into account the differences in the characteristics of the new object and the real estate object being evaluated.

Wear in appraisal means the loss of utility, and hence the value of the subject of appraisal for any reason.

There are two ways to calculate wear:

Lifetime method;

The method of splitting into types of wear.

1. Calculation of wear by the method of life

The cumulative accumulated depreciation is a function of the time of the object.

When calculating the depreciation using the effective age method, the following concepts are used: the physical life of the building, the effective age, the remaining economic life. Consider the periods of the building's life and the estimated indicators characterizing them (see Fig. 1)

Physical life of a building (FZH) - the period of operation of a building, during which the state of the load-bearing structural elements of the building meets certain criteria (structural reliability, physical durability, etc.). The physical life of an object is laid down during construction and depends on the capital group of the building. Physical life ends when the object is demolished.

Chronological age (ХВ) - the period of time that has passed from the commissioning of the facility to the date of the assessment.

Economic life (EL) is determined by the operating time during which the object generates income. During this period, ongoing improvements contribute to the value of the property.

The effective age (EE) is calculated on the basis of the chronological age of the building, taking into account its technical condition and the economic factors prevailing at the date of the assessment that affect the value of the evaluated object. Depending on the characteristics of the building's operation, the effective age may differ from the chronological age up or down. In the case of normal (typical) building operation, the effective age is usually equal to the chronological age.

The remaining economic life (OSED) of a building is the period of time from the date of the assessment until the end of its economic life (Figure 1).

The life periods of the building and the estimated indicators characterizing them (Fig. 1)

Determination of the depreciation of buildings by the life-cycle method is based on an examination of the buildings of the assessed object and the assumption that the effective age of the object relates to the typical period of economic life as the accumulated depreciation to the cost of reproduction (replacement) of the building.

Indicators of physical wear and tear, effective age and economic life are in a certain ratio, which can be expressed by the formula:

I = (EV: VF) 100% = [EV: (EV + OSF)] 100%, (1)

where And - wear,%;

EV - effective age, determined by an expert on the basis of the technical condition of the elements or the building as a whole;

VF - typical length of physical life;

OSFL - Physical Life Remaining.

I = (XB: VF) 100%, (2)

where And - wear,%;

VF is a typical length of physical life.

The use of formula (2) is also relevant when calculating percentage adjustments for depreciation in compared objects (comparative sales method), when it is not possible for the appraiser to inspect the selected analogues to determine the indicators used in formula (1).

The percentage of depreciation of elements or the building as a whole calculated in this way can be converted into value (impairment):

O = SV (I: 100), (3)

where And - wear,%; SV is the cost of reproduction (replacement cost).

2. Calculation of wear by splitting into types of wear

The most common is method of splitting into types of wear.

Depending on the factors that reduce the value of real estate, depreciation is divided into physical, functional and external (economic). Physical and functional wear and tear can be removable and irreparable. Economic wear and tear are usually irreparable.

Classification of depreciation of real estate objects (Fig. 2.)

Depreciation is considered removable if its elimination is physically possible and economically feasible. The sum of all possible types of depreciation is the accumulated depreciation of the property.

Physical deterioration reflects changes physical properties real estate object over time (for example, defects in structural elements). Physical wear and tear can occur under the influence of operational factors or under the influence of natural and natural factors.

There are four main methods for calculating physical depreciation:

Expert;

Regulatory (or accounting);

Cost;

A method for calculating the life of a building.

The most accurate and most time consuming method is expert. It involves creating a defective statement and determining the percentage of wear of all structural elements of a building or structure.

Example: Table 1 shows the deterioration of individual structural elements of a building using an expert method. Table 1

Calculation of the physical deterioration of the building (Table 2): table 2

Normative method the calculation of physical depreciation is based on the use of various regulatory instructions of the intersectoral or departmental level. It is used extremely rarely in appraisal practice.

Cost method is to determine the cost of restoring elements of buildings and structures. By inspection, the percentage of wear of each building element is determined, which is then converted into value. The cost method is used to determine the removable physical depreciation.

A conventional example of calculating physical depreciation by the cost method is given in Table 3.

Table 3

This method allows you to immediately calculate the wear of elements and the building as a whole in value terms. Since the impairment is calculated on the basis of reasonable actual costs of bringing the worn out elements to a practically new condition, the result of this approach can be considered fairly accurate. The disadvantages of the method are the mandatory detailing and the accuracy of calculating the cost of repairing worn-out building elements.

Lifetime method used to calculate physical depreciation.

TO functional wear include a decrease in the value of property associated with the inconsistency of design and planning solutions, building standards, design quality, material of manufacture to modern requirements for these items. The amount of removable depreciation is defined as the difference between the potential value of the building at the time of its assessment with the updated elements and its same value as of the date of the assessment without the updated elements (the difference between the cost of reproduction of the building and its replacement cost).

Reasons for functional wear:

Disadvantages requiring the addition of elements;

Disadvantages requiring replacement or modernization of elements;

Over-enhancements.

Disadvantages requiring the addition of elements are elements of the building and equipment that are not present in the existing environment and, without which it cannot meet modern operational standards. Depreciation due to these items is measured by the cost of adding these items, including their installation.

Functional wear can be either removable or irreparable. Recoverable functional wear is most often calculated using the cost method.

Disadvantages requiring replacement or modernization of elements are positions that still perform their functions, but no longer meet modern standards (water and gas meters and fire fighting equipment). Depreciation for these items is measured as the cost of existing elements, taking into account their physical deterioration, minus the cost of returning materials, plus the cost of dismantling existing ones, and plus the cost of installing new elements. The cost of returning materials is calculated as the cost of dismantled materials and equipment when they are used at other facilities (revised residual value).

Oversized - positions and elements of the structure, the presence of which is currently inadequate to the modern requirements of market standards. Eliminable functional wear in this case is measured as the cost of reproduction of super-improvement positions minus physical wear and tear, plus the cost of dismantling and minus the salvage value of dismantled elements.

An example of super-improvements is a situation when the owner of a house, adjusting it for himself, made any changes for his own convenience (investment value), which are not adequate from the point of view of a typical user. These include the redevelopment of the usable area of the premises for a specific use, due to the hobbies of the owner or his occupation. Removable functional wear in such a situation is determined by the current cost of the cost of bringing the changed elements to their original state.

In addition, the concept of over-improvements is closely related to the segment of the real estate market, where the same improvements can be recognized as both appropriate to a specific segment and redundant from the point of view of a typical user. Table 4 provides an example of calculating functional avoidable wear. Table 4

Fatal functional wear is caused by outdated space-planning and / or structural characteristics of the assessed buildings in relation to modern building standards. A sign of unrecoverable functional wear is the economic inexpediency of implementing the costs of eliminating these shortcomings. In addition, it is necessary to take into account the prevailing market conditions at the date of the assessment for the adequate architectural conformity of the building to its purpose.

Depending on the specific situation, the cost of irreparable functional wear can be determined in two ways:

Capitalization of losses in rent;

Capitalization of excess operating costs.

To determine the necessary calculated indicators (rental rates, capitalization rates, etc.), adjusted data for comparable analogs are used.

At the same time, the selected analogs should not have signs of unrecoverable functional wear identified in the assessment object. In addition, the total income brought by the property complex as a whole (building and land) and expressed in rent must be respectively divided into two components. To separate the part of the income attributable to a building, you can use the investment balance method for the building or the method of analyzing the ratio of the value of the land plot to the total selling price of the property complex. In the example below, the specified procedure is considered to have been completed in the process of preliminary calculations (Table 5).

Table 5.

Determination of impairment caused by irreparable functional depreciation due to an outdated volumetric planning solution (specific area, cubic capacity) is carried out by capitalization of losses in rent.

The calculation of unrecoverable functional wear by capitalizing the excess operating costs required to keep the building in good condition can be done in a similar way. This approach is preferable for assessing the unavoidable functional deterioration of buildings that differ in nonstandard architectural solutions and, in which, nevertheless, the amount of rent is comparable to the rent for modern analogue facilities, in contrast to the amount of operating costs.

An example of determining the value of functional wear by capitalization of excess operating costs is presented in Table 6.

Table 6.

External (economic) wear- depreciation of an object due to the negative influence of the external environment in relation to the object of assessment: location, market situation, easements imposed on certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc. Although external wear and tear is in most cases unrecoverable, sometimes it can self-eliminate due to a positive change in the surrounding market environment.

The following methods can be used to assess external wear:

Capitalization method for rent losses;

Capitalization method for excess operating costs;

Paired sales method;

Lifetime method.

The assessment of external depreciation by the method of capitalization of losses in rent and by the method of capitalization of excess operating losses is carried out similarly to the calculation by these methods of functional depreciation, discussed above. In the case of external wear assessment, it is necessary to identify rental losses caused by signs of external wear or excess operating costs caused by signs of external wear.

The paired sales method is based on the analysis of available pricing information for recently sold similar items (paired sales). In this case, it is assumed that the objects of the pair sale differ from each other only in the revealed economic depreciation and correlated to the object of assessment.

A similar approach to calculating external wear is shown in Table 7.

Table 7.

Demolition reasons:

The need for redevelopment;

Expansion of transport routes.

The technical condition of the demolished buildings should be taken into account, which in many cases would allow them to be operated for a fairly long period of time.

Example. A building that was previously withdrawn from the housing stock and now adapted for administrative needs is subject to the assessment. The building is in municipal ownership. Physical wear and tear of the assessed building, according to the BTI, at the time of assessment is 40%. The technical condition of the building, location and well-developed infrastructure indicate a fairly high commercial attractiveness of the facility from potential investors. However, according to the redevelopment plan, for the reasons stated above, the building is subject to demolition after five years from the date of appraisal.

When examining the object by an expert, the following indicators were determined:

1) the effective age of the assessed building is 30 years;

2) the remaining economic life is 60 years.

The percentage of accumulated depreciation without taking into account the effect of an external factor is calculated by the formula:

I = EV: (EV + OSEZH) 100 = (30:90) 100 = 33%.

Percentage of wear, taking into account the effect of an external factor:

I = (30/35) 100 = 86%.

The accumulated depreciation calculated in this case in the amount of 86% is mainly due to the influence of an external factor. The share of possible accounting for other types of wear in this result is extremely small, which allows us to consider the result obtained as external wear. A sharp reduction in the remaining economic life of a building leads to a decrease in investment attractiveness and, as a result, to a landslide drop in the likely sale price. In such cases, the purpose of the appraisal is to calculate not the full ownership of the building being appraised, but short-term lease rights for the remaining economic (physical) life, provided that the potential investor sees any benefit from this acquisition.

Definitions Object real estate which does not match the established ... old objects real estate when reliable information is available for the calculation wear and tear; definition market ...

Choosing a way to reduce the total wear and tear object commercial real estate in order to increase its market value ...

Thesis >> Economics

... wear object real estate. Definition physical wear and tear consists of several successive stages: definition the magnitude of the correctable physical wear and tear; definition ...

The cost approach is a set of methods for assessing the value of a real estate object based on determining the costs required to restore or replace a real estate object, taking into account its depreciation. The cost approach is based on the principle of substitution, according to which it is assumed that a reasonable buyer will not pay more for the property than the cost of constructing a property of similar utility to the property being valued.

According to the cost approach, the total cost of a real estate object (Ob) is determined as the sum of the cost of a plot of land (Suz) and the replacement value (replacement or reproduction cost) of a real estate object (OVS) minus the accumulated depreciation (Siz):

Applying a cost-based approach to real estate appraisal consists of the following stages:

assessment of the market value of the land plot;
assessment of the replacement cost (replacement cost) of the assessed building, including an assessment of the amount of entrepreneurial profit;
calculation of the identified types of wear;
calculation of the final cost of the appraisal object by adjusting the replacement cost for wear and tear, followed by an increase in the resulting value by the cost of the land plot.

Determining the value of a plot of land, which is part of the real estate appraised by the cost method, is based on the assumption of its best and most effective use as free from building.

The following methods are used to assess the market value of land:

sales comparison method;
distribution method;
selection method;
method of division into sections;
residue technique for land;
capitalization of net land rent.

Sales comparison method when the necessary information is available, it is most preferred and generally applicable. The main elements of comparison for land are:

ownership;
financing conditions;
terms of sale;
market conditions;
location;
physical characteristics;
affordable utilities;
zoning conditions;
best and most efficient use.

When valuing land, you can use several units of comparison, adjusting the price of each of them and getting at the end several values of the value that define the value range.

Distribution method based on the premise that for each type of property there is a normal relationship between the value of land and the value of buildings. This ratio is most valid for new improvements that reflect the best and most efficient land use.

Example 27. Determine the cost of a land plot, if it is known that: free plots in this area have not been sold for a long time; the price of a typical house with a plot ranges from 200 to 300 thousand rubles; the cost of a land plot of the same size in the immediate vicinity of the appraisal object is 90 thousand rubles; direct costs for the construction of a typical house - 100 thousand rubles; entrepreneur's profit and indirect costs - 80 thousand rubles.

1. Let's determine the share of the value of the land plot in the total value of the property:

2. Determine the cost of the land:

The cost of the site can range from 67 thousand rubles. up to 100 thousand rubles. (1/3 of the range of real estate values, respectively from 200 and 300 thousand rubles).

Selection method is a variation of the distribution method. The value of the land is deducted from the value of the property by deducting the value of the improvements, taking into account their depreciation. This method is used to evaluate suburban areas where the contribution of improvements to the total cost is small and fairly easy to determine.

The method is used in the absence of information about the sale of vacant land plots in the immediate vicinity.

Parcel method It is used in cases where dividing a plot into several smaller ones represents the best and most efficient use of the land. At the same time, the external and internal improvements of the parcels created during the layout provide the conditions for the best and most efficient use of the land.

Improvement costs include:

costs for the breakdown, clearance and leveling of sites;
expenses for the construction of roads, sidewalks, engineering networks, drainage;
taxes, insurance, engineering and technical staff salaries;
marketing costs;
contractor profits and overheads;
the entrepreneur's profit.

Example 28. Determine the cost of the land mass if it is known that the developer plans to divide it into 30 plots and then sell each one for 25 thousand rubles. within 4 years (it is assumed that the net income will flow evenly, the rate of return is 10%). In this case, the following costs will take place: planning, cleaning, engineering networks, project - 180 thousand rubles; management - 10 thousand rubles; overhead costs and contractor's profit - 60 thousand rubles; marketing - 20 thousand rubles; taxes and insurance - 10 thousand rubles; the entrepreneur's profit is 40 thousand rubles.

1. Determine the potential income from the sale of prepared plots:

30 25 = 750 thousand rubles.

2. Determine the costs of improvements and site arrangement:

180 + 10 + 60 + 20 + 10 + 40 = 320 thousand rubles.

3. The present value of the land mass, taking into account the uniform receipt of net income over 4 years and the rate of return of 10%:

where 3.1699 is the coefficient of the present value of the annuity.

Thus, the cost of the land mass is 340 thousand rubles.

Remnant technique for earth used in the absence of data on sales of vacant land plots.

Capitalization method of net land rent is based on the principle of added productivity, according to which, after distribution among all factors of production of regular income from a business sold on a property, part of this income can be attributed to the land plot.

If evaluated land plot leased, then its cost can be determined by (12). In this case, rent is used as net operating income.

Determination of the replacement cost (replacement cost) of the assessed building based on the inclusion of direct and indirect costs in the cost of new construction.

Direct costs are costs directly related to construction and generally include:

the cost of building materials, products and equipment;
the cost of operating construction machines and mechanisms;
the main wages construction workers;
the cost of temporary buildings, structures and engineering networks;
contractor profits and overheads.

Indirect costs - costs associated with, but not directly related to construction. Indirect costs typically include:

costs of preparing the construction site;
costs for design and survey work;
other costs and works;
the content of the directorate (technical supervision) of an enterprise (institution) under construction, the costs of designer supervision;
other types of indirect costs.

Determination of Direct Cost Values based on application general rules determining the estimated cost of construction, set out in the current regulatory and guidance documents.

Direct cost calculations can be done in one of two ways:

recalculation of the known value of the estimated cost of construction using indices;
by drawing up a restoration estimate for the object of assessment.

If design and estimate documentation is available for the appraisal object, the value of direct costs is determined as the estimated cost of construction recalculated as of the date of appraisal using indices that take into account the ratio of the current price level in construction to prices in 1984 taken as baseline (index method).

In the absence of design and estimate documentation for the object of assessment, the estimate should be restored in one of two ways:

according to consolidated estimated standards (comparative unit method);
according to collections of unit prices and price lists (method of quantitative analysis).

The use of consolidated estimated standards for calculating direct costs is permissible for standard design solutions for buildings and structures, as well as for re-applied economic individual projects.

For the purpose of assessing the market value of real estate, the following types of aggregated indicators are used:

aggregated indicators of estimated cost (USPS);
consolidated estimate norms (USN) for buildings, structures, structures and types of work;
price lists for the construction of buildings and structures (PRES);
enlarged indicators of replacement cost for the purpose of revaluation of fixed assets.

At the same time, the cost of construction and installation work can be broken down by type of work and complex of building structures (breakdown method into components).

Indirect costs are generally defined as a percentage of direct costs based on market data.

Entrepreneur's profit is defined as the amount that the entrepreneur expects to receive in the form of a premium for the use of his capital. The value of the entrepreneur's profit is taken from market data.

Wear Is a decrease in the value of a property due to various reasons... Depreciation is usually measured as a percentage, and depreciation is measured as impairment.

Accumulated (cumulative) depreciation of an appraised object is a set of all possible types of depreciation, which is characterized by a decrease in the usefulness of a real estate object, its consumer attractiveness from the point of view of a potential investor and is expressed in a decrease in value over time (depreciation) under the influence of various factors. As the facility is operated, the parameters that characterize the structural reliability of buildings and structures, as well as their functional compliance with current and even more future use associated with human life, gradually deteriorate. In addition, the value of real estate is equally influenced by external factors due to changes in the market environment, the imposition of restrictions on certain uses of buildings, etc.

Depreciation in appraisal practice must be distinguished in meaning from a similar term used in accounting (depreciation). Estimated depreciation is one of the main parameters that allows you to calculate the present value of the property being valued for a specific date.

Thus, accounting for the depreciation of an object is a kind of adjustment of the value of the newly reproduced building (reproduced using the cost approach) in order to determine the value of the object being evaluated.

The cumulative accumulated depreciation is a function of the object's lifetime. Let us consider the basic evaluative concepts that characterize this indicator (Fig. 1).

Rice. 1. The periods of the building's life and the estimated indicators characterizing them

Building Physical Life (FJ)- the period of operation of the building, during which the state of the load-bearing structural elements of the building meets certain criteria (structural reliability, physical durability, etc.). The term of the physical life of an object is laid down during construction and depends on the capital group of buildings. Physical life ends when the object is demolished.

Chronological age (XB)- the period of time that has elapsed from the day the object was put into operation until the date of assessment.

Economic Life (EJ)- the operating time during which the object generates income. During this period, ongoing improvements contribute to the value of the property. The economic life of an object ends when the operation of the object cannot generate income indicated by the corresponding rate for comparable objects in this segment of the real estate market. At the same time, the ongoing improvements no longer contribute to the value of the object due to its general wear and tear.

Effective age (EE) is calculated on the basis of the chronological age of the building, taking into account its technical condition and the economic factors prevailing at the date of the assessment that affect the value of the evaluated object. Depending on the characteristics of the building's operation, the effective age may differ from the chronological age up or down. In the case of normal (typical) building operation, the effective age is usually equal to the chronological age.

Economic Life Remaining (OSER) buildings - the period of time from the date of assessment until the end of its economic life.

The subjectivity of determining such indicators as economic life and effective age requires an appraiser to have a sufficiently high qualification and considerable practical experience.

To determine the amount of accumulated wear, I use the following methods:

sales comparison method;
accounting;
breakdown method.

Sales comparison method is based on the determination of the amount of accumulated depreciation as the difference between the cost of new construction and the cost of the structure as of the valuation date, while the availability of reliable data on the sales of such objects and the value of vacant land plots is a prerequisite.

In value terms, the cumulative depreciation is the difference between the replacement cost and the market price of the object being assessed:

Example 29. Determine the accumulated depreciation of a real estate object (cottage) if the following information about analogue objects is known:

Let's determine the accumulated depreciation of the property. The calculations are presented in the following table:

Comparison item	Analog object
Comparison item	1	2	3
Land value
Cost of new construction at the date of valuation
Sale price, thousand rubles
Present value of structures
Total accumulated depreciation
Accumulated depreciation as a percentage of construction costs

Thus, the accumulated depreciation of the property being valued is approximately 31.9%.

Accounting method of calculating depreciation based on the use of accounting methods, that is, on determining the ratio of the chronological age of the object to its standard service life, determined on the basis of "Uniform norms of depreciation deductions for the complete restoration of fixed assets in the Russian Federation."

Breakdown method consists in a detailed consideration and accounting of all types of wear, which include (Fig. 2):

disposable and irreparable physical wear and tear;
disposable and irreparable functional wear;
external wear.

Removable (correctable) wear is wear, the elimination of which is physically possible and economically feasible, that is, the costs incurred to eliminate this or that type of wear contribute to an increase in the value of the object as a whole.

Unrecoverable (incorrigible) wear is wear, the elimination of which is either physically impossible or economically inexpedient, i.e. the costs incurred to eliminate one or another type of wear do not contribute to an increase in the value of the object as a whole.

Rice. 2. Classification of depreciation of real estate objects

To apply the breakdown method in determining the accumulated depreciation, it is necessary to have data on the cost of new construction, broken down by structural elements, as a calculation base.

Physical deterioration- a gradual loss of the technical and operational qualities of the object originally laid down during the construction under the influence of natural and climatic factors, as well as human life. Wear and tear reflects changes in the physical properties of a property over time (for example, defects in structural elements).

There are four main methods for calculating physical depreciation:

expert (normative);
cost;
method for calculating the life of a building.

Expert method for calculating physical wear and tear based on the creation of a defective statement and determination of the percentage of wear of all structural elements of a building or structure. The expert method is the most accurate, but also the most time consuming.

This method assumes the use of various regulatory instructions at the intersectoral or departmental level. As an example, we can name VSN 53-86, used by the Bureau of Technical Inventory in order to assess the physical deterioration of residential buildings during technical inventory, planning the overhaul of the housing stock, regardless of its departmental affiliation. These rules provide a characteristic of the physical wear and tear of various structural elements of buildings and their assessment.

The physical deterioration of the building is determined as follows:

F f - physical deterioration of the building, (%);

F i - physical wear of the i-th structural element, (%);

L i - coefficient corresponding to the share of the replacement cost of the i-th structural element (site) in the total cost of the building;

n is the number of structural elements in the building.

The shares of the replacement cost of individual structures, elements and systems in the total replacement cost of a building should be taken according to the enlarged indicators of the replacement cost of residential buildings, approved in the prescribed manner, and for structures, elements and systems that do not have approved indicators - at their estimated cost.

Example 30. Determine the physical deterioration of a residential building, if it is known that during its examination physical deterioration of all structural elements was revealed:

foundations - 10%;
walls - 15%;
overlapping - 20%;
roof - 10%;
floors - 35%;
windows - 40%;
finishing coatings - 30%;
internal plumbing and electrical devices - 50%;
others - 25%.

1. Determine the specific weights of structural elements in accordance with the collection. No. 28 UPVS.

2. The results of assessing the physical deterioration of elements and systems, as well as determining their specific gravity at replacement cost:

	Specific weights of structural elements,%	Wear,%	Specific gravity x percentage of wear
foundations
walls
overlap
roof
floors
window
finishing coatings
internal plumbing and electrical devices
others
Total:

Thus, the physical deterioration of the building is 23.25%

Cost method for calculating physical wear and tear is based on the assumption that physical wear and tear at the time of assessment is expressed by the ratio of the cost of objectively necessary repair measures that eliminate damage to a structure, element or building as a whole, and their replacement cost.

Example 31. Determine the physical wear and tear of a residential building if it is known that the replacement cost of structural elements and the objectively necessary costs for their repair are respectively: foundations - 3,200 thousand rubles, 640 thousand rubles; walls - 4,000 thousand rubles, 1,200 thousand rubles; overlapping - 800 thousand rubles, 160 thousand rubles; others - 8,000 thousand rubles, 2,800 thousand rubles.

Let's determine the amount of physical wear and tear. The results of assessing the physical deterioration of elements, as well as the determination of their share in terms of replacement cost:

Name of building elements	Replacement cost of the element, thousand rubles	Objectively necessary repair costs, thousand rubles	Wear,%
foundations
walls
overlap
others
Total:

Thus, the physical deterioration of the building is 30%

This method allows you to immediately calculate the wear of elements and the building as a whole in value terms. Since the impairment is calculated based on the reasonable actual costs of bringing the worn-out elements to “practically new condition”, the result of this approach can be considered fairly accurate. The disadvantages of the method are the mandatory detailing and the accuracy of calculating the costs of repairing worn-out building elements.

Method for calculating the life of a building is based on the assumption that the relationship between physical wear and tear (FI) and replacement cost (HC) is determined by the relationship between effective age (EW) and typical economic life (VF):

Example 32. Determine the physical wear and tear of a residential building if it is known that the replacement cost, actual age and general physical life of its structural elements are respectively: foundations - 1,200 thousand rubles, 10 years, 15 years; walls - 400 thousand rubles, 5 years, 10 years; overlapping - 300 thousand rubles, 6 years, 15 years; others - 900 thousand rubles, 1 year, 10 years.

Let's determine the amount of physical wear and tear. The results of assessing the physical deterioration of elements:

Name of building elements	Actual age, years	General physical life, years	Wear,%	Depreciation, thousand rubles



finishing coatings
Total:

Thus, the physical deterioration of the building is 1210 rubles. or 43.2%.

Determination of the amount of physical wear and tear consists of several successive stages:

determination of the amount of correctable physical wear and tear;
determination of the amount of incorrigible physical wear and tear in short-lived elements;
determination of the amount of incorrigible physical wear and tear in long-lived elements.

Determination of the amount of correctable physical wear and tear (it is also called deferred repair, since it is assumed that a typical buyer will make immediate repairs in order to restore the normal operational characteristics of the structure: redecoration, restoration of leaking roof sections, repair of engineering equipment, etc.) is carried out using cost or expert method for calculating physical wear and tear.

Irreparable physical wear and tear corresponds to positions, the correction of which is currently almost impossible or economically impractical. The amount of this type of depreciation is determined on the basis of the difference between the full replacement (or replacement) cost and the amount of removable physical depreciation.

For the purposes of calculating wear and tear, structural elements that have unrecoverable physical wear are divided into long-lived and short-lived.

For long-lived elements, the expected residual life coincides with the residual economic life of the entire structure. Short-lived elements have less residual economic life than the entire structure.

To assess the incorrigible physical deterioration in short-lived elements, the method of calculating the life of the building is used: the difference between the total replacement (or replacement) cost of the element and the sum of the correctable deterioration of the element is multiplied by the ratio of the actual age to the total physical life of the element.

In this case, the overall physical life of an element is determined by reference data, taking into account periodic repairs and maintaining normal operational characteristics.

To assess the incorrigible physical deterioration in long-lived elements, the method of calculating the life of a building is also used: the value of the corrected physical deterioration and the sum of the replacement cost of short-lived elements with incorrigible physical deterioration are subtracted from the full replacement (or replacement) cost and the result obtained is multiplied by the residual replacement (or replacement cost) ) long-lived elements, as well as the relationship of the actual age to the overall physical life of the building.

The overall physical life of a building is determined depending on the type of basic structural elements for different categories of buildings in terms of durability. The classification of residential and public buildings by durability is given in the regulatory literature.

Example 33. Determine the physical wear and tear of a residential building. We will give the initial data as the calculation proceeds.

1. Based on the estimate documentation, we will determine the cost of new construction to assess the accumulated depreciation:

Name of building elements	Replacement cost, thousand rubles
Direct costs (materials and equipment, labor costs, overhead costs and contractor's profit), incl.
construction of foundations
exterior wall construction
floor device
roofing device
installation of partitions
false ceilings
flooring
interior and exterior decoration
sewerage system
power supply system
heating system
Ventilation and air conditioning
Indirect costs
Entrepreneur's profit
Total replacement cost

2. Determine the amount of correctable physical wear:

Thus, the cost of correctable depreciation is 3,000 thousand rubles.

2. Determine the value of incorrigible physical wear and tear in short-lived elements:

Name of building elements	Replacement cost of the element, thousand rubles	Actual age, years	General physical life, years	Wear,%	Depreciation, thousand rubles
roof
floors
finishing
sewerage
power supply system
heating system
Ventilation and air conditioning
Total:

Thus, the cost of incorrigible physical wear and tear in short-lived elements is 22,967 thousand rubles, the replacement cost of short-lived elements with incorrigible physical wear is 33,000 thousand rubles.

3. Determine the value of incorrigible physical wear and tear in long-lived elements:

Indicator name	Amount, thousand rubles
replacement cost
replacement cost of correctable physical wear and tear
replacement cost of short-lived elements with incorrigible physical wear
replacement cost of long-lived elements with irreparable wear	174 900 - 3 000 - 33 000 = 138 900
actual age
general physical life
incorrigible physical wear and tear of long-lived elements (10:75) * 138 900

Thus, the cost of incorrigible physical wear and tear in long-lived elements is 22,224 thousand rubles.

3. Determine the value of the total physical deterioration of the building:

Thousand. rub.

Thus, the cost of the total physical depreciation of the building is 48,191 thousand rubles. or 27.6%.

Functional wear- this is a loss in value caused by the fact that the object does not meet modern standards: from the point of view of its functional usefulness, architectural and aesthetic, space-planning, constructive solutions, livability, safety, comfort and other functional characteristics.

The following types of functional wear are distinguished:

recoverable wear (if the additionally received value exceeds the cost of restoration);
irreparable wear (if the additionally received value does not exceed the cost of restoration).

Correctable functional wear is measured by the cost of correcting it and is caused by:

disadvantages requiring the addition of elements;
shortcomings requiring replacement or modernization of elements;
"Super-improvements".

Disadvantages requiring the addition of elements- building elements and equipment that are not in the existing building and without which it cannot meet modern operational standards.

A quantitative measure of the correctable functional wear due to deficiencies requiring an addition is the difference between the cost of performing the required additions at the time of assessment and the cost of performing the same additions if they were performed during the construction of the object of assessment.

Disadvantages requiring replacement or upgrading of elements- building elements and equipment that are in the existing building and still perform their functions, but no longer meet modern operational standards.

Recoverable functional wear due to items requiring replacement or modernization is measured as the cost of existing elements, taking into account their physical wear and tear, minus the cost of returning materials, plus the cost of dismantling existing ones and plus the cost of installing new elements. In this case, the cost of returning materials is defined as the cost of dismantled materials and equipment when used at other facilities.

"Over-Improvements"- building elements and equipment that are in the existing building and the presence of which is currently inadequate to modern operational standards.

Recoverable functional wear due to “over-enhancements” is measured as the current replacement value of “over-enhancements” items, minus physical wear, plus the cost of dismantling, and minus return of materials, if any.

If the cost of construction is determined as substitute, then when determining the correctable functional depreciation, there are some peculiarities. Since in this case there are no "super-improvements", there is no need to determine the share of physical wear and tear falling on them. However, the cost of fixing "over-enhancements" still needs to be considered.

Example 34. Determine the correctable functional wear and tear of an office building, if it is known that:

modern standards require the installation of an air conditioner in the building, the cost of installing it in an existing building is 150 thousand rubles, and the cost of installation in the same building during its construction is 110 thousand rubles.
the electrical fittings installed in the building do not meet modern market standards, while the cost of the existing electrical fittings included in replacement cost, is 350 thousand rubles, the physical wear and tear of the existing electrical fittings - 200 thousand rubles, the cost of dismantling the existing electrical fittings - 100 thousand rubles, the cost of returning materials - 10 thousand rubles, the cost of installing new electrical fittings - 190 thousand rubles.
there is a warehouse in the building and an analysis of the best and most effective use has shown that at present it is advisable to use this area as an office space, while the current replacement cost of the warehouse area is 800 thousand rubles, physical depreciation is 50 thousand rubles, the cost of liquidation warehouse - 80 thousand rubles.

1. Determine the amount of correctable functional wear caused by deficiencies requiring the addition of elements (in our case, an air conditioner):

Thousand. rub.

2. Determine the amount of correctable functional wear caused by deficiencies requiring replacement or modernization of elements (in our case, electrical fittings):

Thousand. rub.

3. Determine the amount of correctable functional wear caused by "superimprovement" (in our case, positions that are functionally inherent in the warehouse):

Thousand. rub.

Thus, the cost of correctable functional deterioration of the building is:

Thousand. rub.

Fatal functional wear is caused by:

disadvantages due to items not included in the cost of the new, but which should be;
disadvantages due to items included in the cost of the new, but which should not be;
"Super-improvements".

Incorrigible functional depreciation from items not included in the cost of new construction is measured as the net loss of income attributable to this deficiency, capitalized at the capitalization rate for buildings, minus the value of those items if they were included in the cost of new construction.

The calculation of irreparable functional wear due to disadvantages does not depend on whether the replacement or replacement cost will be taken as a basis.

Irreparable functional wear due to items included in the cost of new construction, but which should not be, is measured as present value new, minus the attributable physical depreciation, minus the value of the added (that is, the present value of the additional costs associated with the presence of the item).

Irreparable functional wear due to "super-enhancements" is determined depending on the type of value that is taken as the basis.

In the case of replacement cost, the irreparable functional wear due to "over-enhancements" is measured as the replacement cost of "over-enhancements" minus their physical wear, plus the present value (PV) cost of the owner associated with the "over-enhancements", minus any value added. At the same time, additional taxes, insurance, maintenance costs, utility bills are attributed to the owner's costs, and increased rent, etc., associated with the presence of "superimprovement", is attributed to the added value.

Example 35. Determine the irreparable functional wear and tear of an office building, if it is known that:

when determining the cost of new construction for the building in question, the installation of a fire extinguishing system was not taken into account (since it does not exist in the existing building), while it is assumed that the net loss of income caused by the lack of installation is 20 thousand rubles, the capitalization rate for buildings is 10% , and the cost of installing a fire extinguishing system during the construction of a new building is 150 thousand rubles.
the estimated building has a large floor height, which is excessive from the market point of view as of the valuation date, while the current replacement cost of the existing building is 174,900 thousand rubles, and the current replacement cost of exactly the same building, which has a normal, from the market point of view, height floors, 172,900 thousand rubles, physical depreciation is determined at the level of 40%, annually the owner incurs additional costs associated with a high floor height (heating, lighting, etc.), in the amount of 500 thousand rubles, the existing capitalization ratio for buildings is 10%.

1. Determine the amount of irreparable functional wear caused by deficiencies that are not included in the cost of new construction, but which should be based on market data on income losses caused by the lack of an element or equipment (in our case, a fire extinguishing system)

Thousand. rub.

2. Determine the value of the incorrigible functional due to "superimprovement" (in our case, a large floor height):

Thousand. rub.

Thus, the cost of incorrigible functional deterioration of the building is:

Thousand. rub.

External (economic) wear- depreciation of the object, due to the negative influence of the external environment in relation to the object of assessment: the market situation, easements imposed on certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc. of cases is unrecoverable due to the invariability of the location, but in some cases it can “remove itself” due to a positive change in the surrounding market environment.

The following methods can be used to assess external wear:

the method of capitalizing the loss of income attributable to external influences;
a method of comparing sales of similar objects with and without external influences.

If you have enough data, the second approach is preferable.

Income loss capitalization method involves determining the loss of income of all property due to external influences. The building's share of the loss is then capitalized at the building's capitalization rate.

Example 36. Determine the external (economic) depreciation of the warehouse, if it is known that: net income excluding external factors after the elimination of correctable physical and functional depreciation is 25,000 thousand rubles; current net income after elimination of correctable physical and functional depreciation - 21,000 thousand rubles; the cost of land - 5,000 thousand rubles, the capitalization rate for land - 10%; the capitalization rate for land is 15%.

1. Let's define the loss of net income due to external factors:

Thousand. rub.

2. Define the net income attributable to the building:

Thousand. rub.

3. Define the loss of net income attributable to the building:

thousand roubles.

Thus, the cost of external (economic) depreciation of the warehouse is:

Thousand. rub.

Paired Selling Method based on an analysis of available pricing information for recently sold similar items (pair sales). In this case, it is assumed that the objects of the pair sale differ from each other only in the revealed economic depreciation and correlated to the object of assessment.

Example 37. Determine the external (economic) wear and tear of a warehouse located far from the clothing market, if it is known that: the selling price of an analogue object located far from the clothing market is 600 thousand rubles; selling price of an analogue object located near the clothing market - 450 thousand rubles; the difference in physical and other differences between analogue objects is 60 thousand rubles.

1. Let's determine the cost of external (economic) depreciation of the warehouse:

Thousand. rub.

The cost approach has several advantages and disadvantages.

Benefits of the cost approach:

When evaluating new objects, the cost approach is the most reliable.
This approach is advisable or the only possible in the following cases:
- technical and economic analysis of the cost of new construction;
- justification of the need to update the existing facility;
- assessment of special buildings;
- when evaluating objects in "passive" market sectors;
- analysis of the efficiency of land use;
- solving problems of object insurance;
- solving problems of taxation;
- when agreeing on the values of the real estate object obtained by other methods.

Disadvantages of the cost approach:

1. Costs are not always equivalent to market value.

2. Attempts to achieve a more accurate assessment result are accompanied by a rapid increase in labor costs.

3. Inconsistency between the acquisition costs of the property being valued and the costs of new construction of exactly the same property, since the accumulated depreciation is deducted from the construction cost in the process of assessment.

4. Problems in calculating the cost of reproduction of old buildings.

5. The difficulty of determining the amount of accumulated wear and tear of old buildings and structures.

6. Separate appraisal of the land plot from buildings.

7. Problems of assessment land plots in Russia.

Literature

1. "On the procedure for assessing state-owned real estate and rights to it." Order of the Governor of St. Petersburg dated August 1, 1996 No. 113-r.

2. "Uniform norms of depreciation deductions for the complete restoration of fixed assets in the Russian Federation". Resolution of the Government of the Russian Federation

Breakdown method consists in a detailed consideration and accounting of all types of wear, which include (Fig. 2):

disposable and irreparable physical wear and tear;
disposable and irreparable functional wear;
external wear.

Removable (correctable) wear is wear, the elimination of which is physically possible and economically feasible, i.e. the costs incurred for the elimination of this or that type of wear increase the value of the object as a whole.

Unrecoverable (irreparable) wear is wear, the elimination of which is either physically impossible or economically inexpedient, i.e. the costs incurred for the elimination of this or that type of wear do not contribute to an increase in the value of the object as a whole.

Rice. 4 Classification of depreciation of real estate objects

To apply the breakdown method in determining the accumulated depreciation, it is necessary to have data on the cost of new construction, broken down by structural elements, as a calculation base.

Physical deterioration- a gradual loss of the technical and operational qualities of the object originally laid down during the construction under the influence of natural and climatic factors, as well as human life. Wear and tear reflects changes in the physical properties of a property over time (for example, defects in structural elements).

There are four main methods for calculating physical depreciation:

expert (normative);
cost;
method for calculating the life of a building.

The physical deterioration of the building is determined as follows:

F f - physical deterioration of the building, (%);

F i - physical wear of the i-th structural element (%);

L i - coefficient corresponding to the share of the replacement cost of the i-th structural element (site) in the total cost of the building;

n - the number of structural elements in the building

The shares of the replacement cost of individual structures, elements and systems in the total replacement cost of a building should be taken according to the enlarged indicators of the replacement cost of residential buildings, approved in accordance with the established procedure, and for structures, elements and systems that do not have approved indicators - at their estimated cost.

Example 30. Determine the physical deterioration of a residential building, if it is known that during its examination physical deterioration of all structural elements was revealed:

foundations - 10%;
walls - 15%;
overlapping - 20%;
roof - 10%;
floors - 35%;
windows - 40%;
finishing coatings - 30%;
internal plumbing and electrical devices - 50%;
others - 25%.

Solution:

1. Determine the specific weights of structural elements in accordance with the collection. No. 28 UPVS.

2. The results of assessing the physical deterioration of elements and systems, as well as determining their specific weight in terms of replacement cost:

Name of building elements	Specific weights of structural elements,%		Specific gravity x percentage of wear
foundations
walls
overlap
roof
floors
window
finishing coatings
internal plumbing and electrical devices
others
		-

Thus, the physical deterioration of the building is 23.25%

Let's determine the amount of physical wear and tear. The results of assessing the physical deterioration of elements, as well as the determination of their share in terms of replacement cost:

Name of building elements	Replacement cost of the element, thousand rubles	Objectively necessary repair costs, thousand rubles
foundations
walls
overlap
others

Thus, the physical deterioration of the building is 30%

This method allows you to immediately calculate the wear of elements and the building as a whole in value terms. Since the impairment is calculated based on the reasonable actual costs of bringing the worn-out elements to “practically new condition”, the result of this approach can be considered fairly accurate. The disadvantages of the method are the mandatory detailing and the accuracy of calculating the cost of repairing worn-out building elements.

Example 32. Determine the physical wear and tear of a residential building, if it is known that the replacement cost, actual age and general physical life of its structural elements are respectively: foundations - 1,200 thousand rubles, 10 years, 15 years; walls - 400 thousand rubles, 5 years, 10 years; overlapping - 300 thousand rubles, 6 years, 15 years; others - 900 thousand rubles, 1 year, 10 years.

Let's determine the amount of physical wear and tear. The results of assessing the physical deterioration of elements:

Name of building elements	Actual age, years	General physical life, years		Depreciation, thousand rubles
roof
floors
window
finishing coatings
		-	-

Thus, the physical deterioration of the building is 1210 rubles. or 43.2%.

Determination of the amount of physical wear and tear consists of several successive stages:

determination of the amount of correctable physical wear and tear;
determination of the amount of incorrigible physical wear and tear in short-lived elements;
determination of the amount of incorrigible physical wear and tear in long-lived elements.

Determination of the amount of correctable physical wear (it is also called deferred repair, since it is assumed that a typical buyer will make immediate repairs in order to restore the normal operational characteristics of the structure: cosmetic repairs, restoration of leaking roof sections, repair of engineering equipment, etc.) is carried out using cost or expert method for calculating physical wear and tear.

For the purposes of calculating wear and tear, structural elements that have unrecoverable physical wear are divided into long-lived and short-lived.

For long-lived elements, the expected residual life coincides with the residual economic life of the entire structure. Short-lived elements have less residual economic life than the entire structure.

In this case, the overall physical life of an element is determined by reference data, taking into account periodic repairs and maintaining normal operational characteristics.

Example 33. Determine the physical wear and tear of a residential building. We will give the initial data as the calculation proceeds.

1. Based on the estimate documentation, we will determine the cost of new construction to assess the accumulated depreciation:

Name of building elements	Replacement cost, thousand rubles
Direct costs (materials and equipment, labor costs, overhead costs and contractor's profit),
construction of foundations
exterior wall arrangement
floor device
roofing device
installation of partitions
false ceilings
flooring
interior and exterior decoration
sewerage system
power supply system
heating system
Ventilation and air conditioning
Indirect costs
Entrepreneur's profit
Total replacement cost

2. Determine the amount of correctable physical wear:

Thus, the cost of correctable depreciation is 3,000 thousand rubles.

2. Determine the value of incorrigible physical wear and tear in short-lived elements:

Name of building elements	Replacement cost of the element, thousand rubles	Actual age, years	General physical life, years	Depreciation, thousand rubles
roof
floors
finishing
sewerage
power supply system
heating system
Ventilation and air conditioning
Total:		-	-

Depreciation is associated with the total loss of value of the property under the influence of various factors. Depreciation is accounted for mainly in the cost and comparative approaches, while the income approach takes into account certain costs of repair and restoration work.

In value terms, the cumulative depreciation is the difference between the replacement cost and the market value of the assessed object / 1 /.

The methodology of the cost approach is to determine all the costs incurred for the entry into ownership (lease, use) of the land plot (hereinafter referred to as the ZU), and the determination of the cost of new construction of facilities with the introduction of depreciation. It is generally accepted to calculate the cost approach (for example, a building with a piece of land) based on the following expressions:

1). In monetary terms of depreciation and the absence of their influence on each other:

Construction cost * PP - Physical Depreciation - Function Depreciation - External Depreciation + Cost of land rights (formula 1)

2). With relative values of wear, taking into account their influence on each other:

Construction cost * PP * (1 - Physical Depreciation) x (1 - Functional Depreciation) x (1 - External Depreciation) + Cost of land rights (formula 2)

PP is the entrepreneur's profit.

Depreciation is usually attributed only to the cost of construction of objects.

At the same time, it is generally accepted to divide physical and functional wear into removable and irreparable ones according to their effect on the value of real estate objects (it is advisable or inappropriate to make repair costs in terms of increasing the value of objects.).

Physical Wear = Disposable Phys. Wear + Fatal P. Wear.

A similar expression applies to functional wear.

The methodology of the comparative approach when making adjustments to the cost of analogs suggests that we use methods based on the analysis of paired sales, expert methods and statistical methods. The least developed are statistical methods.

The methodology of the income approach when taking into account the costs of maintaining buildings and structures suggests that we use monetary terms that take into account the cost of conducting different types repairs.

A number of works discussed the correctness of the application of expressions for the cost-based approach (Yu.S. Zaitsev, Kartsev P.V.) and their place in them " The value of land rights "(V.G. Mosinets), however, everything that is proposed theoretically must always be supported by practical data, which, unfortunately, has rarely been seen recently.

Let's try to spend general analysis expressions based on the use of the market extraction method (we will analyze the data of the real estate purchase and sale market).

The aim of the research was to study the nature of the dependence of the value of various real estate objects on wear and tear (checking the reliability of the above formulas).

The most developed real estate market is the market of Moscow and the Moscow region. In this market, you can find samples of data on the comparative value of real estate objects with reasonable consideration of only certain types of wear and tear (for example, physical, abstracting from functional and external wear and tear). Based on the analysis of sample data for this market, the following relationships were constructed between the depreciation of objects and their cost. The market analysis was carried out at the cost of proposals, based on the amount of data presented on the sites: www.stn.ru, www.izrukvruki.ru for March - June 2003.

The analysis was carried out using a sample of data for the "average" direction of Moscow - the Southern Administrative District (Southern Administrative District) and, in part, (for apartments) in the South-Western Administrative District (South-Western Administrative District). Accounting for the cost of memory was carried out in a differentiated manner, with the selection of objects located on plots of land, the cost of long-term lease (49 years) which ranged within 450,000: 600,000 dollars / ha. To reduce the influence of memory on the value of objects (except for suburban estates), objects in multi-storey (more than 5 floors) buildings were selected. Suburban estates were analyzed with the value of the storage under the buildings using the "paired sales" method.

This goal implied the solution of the following tasks:

determination of research directions;

sampling of cost data for apartments, office premises, industrial premises, retail premises located in the South-Western Administrative District, the Southern Administrative District of Moscow, and suburban estates located at a distance of 25:40 km. from the Moscow Ring Road in the southern direction;

statistical processing and comparative analysis of data taking into account random measurement errors;

construction of graphical dependences of the cost of premises on their wear and tear and selection of approximating formulas using methods of correlation - regression analysis;

analysis of the obtained dependencies and general conclusions.

Determination of research directions:

The ultimate goal when applying the cost, comparative and income approaches is to reach market value real estate objects. Depreciation is associated with a loss of market value - therefore, their contributions to the value of objects can be verified against comparable data samples using the market extraction method.

Direction No. 1. The influence of physical wear and tear on the value of objects.

1.1. Determination of the contribution "Removable physical wear and tear" in the total market value of real estate.

1.2. Determining the contribution of the total "Physical wear and tear" in the market value of real estate.

Direction number 2. Influence functional wear on the cost of real estate.

Direction number 3. The cumulative effect of wear and tear on the value of real estate. Mutual influence of wear.

1. Determination of the contribution of "Removable Physical Depreciation" to the total market value of real estate objects

The contribution was tentatively determined by the difference in the market value of premises according to the proposals "premises require cosmetic repair" and "renovated premises"; for apartments - according to the difference in prices for the primary ("without finishing") and secondary ("with finishing") market. To exclude the influence of functional and external wear, market extraction was used for the Southern Administrative District of Moscow / 6 /.

Apartments.

For the analysis, data were used for one-room apartments in panel houses(17:22 storey series P-44: P-3), located over 8 km. from the Center, with the representativeness of the compared samples - over 25 samples.

Administrative office premises

For the analysis, we used data on administrative and office premises of class "B2" and "C" in the area range of 800: 1500 sq. M. m. Objects located in capital buildings of I and II capital groups (structural systems KS-1 and KS-4), located at a distance of more than 8 km from the Center, were selected with a representativeness of the compared samples - over 15 samples.

Industrial premises

For the analysis, we used data on production facilities located in capital buildings of I and II capital groups (structural systems KS-1 and KS-4). in the range of areas 1000: 2500 sq. m. Objects located at a distance of more than 8 km were selected. from the Center with a representativeness of the compared samples - over 12 samples.

Commercial premises

For the analysis, we used data on retail premises (shops) located in capital buildings of I and II capital groups (structural systems KS-1 and KS-4). in the range of areas 400: 800 sq. m. Objects located at a distance of more than 8 km were selected. from the Center with a representativeness of the compared samples - over 15 samples.

Suburban possessions.

For the analysis, we used data on country estates (two-level brick cottages) in the area range 160: 280 sq. m (plots with an area of 8:14 ares), located at a distance of 25:40 km. from the Moscow Ring Road in the southern directions with the representativeness of the compared samples of "paired sales" - over 12 pairs.

For ease of use, we will operate with unit values per unit area (USD / sq. M)

Table 1 shows the average data for the samples, as well as the ratio of the average costs before and after repairs, the difference in average costs, the estimated cost of repairs (finishing) and the ratio of the difference in the cost of repairs to the estimated cost of repairs:

Table 1.

Property object		Average cost of an object requiring renovation (Cd) USD / sq. m	Average cost after renovation, (After) USD / sq. m	Corresponding before / after	Difference, (Wed) USD / sq. m	Orientation the estimated cost of repairs, (Co) USD / sq. m	Corresponding change Wed / Co
1-room apartments	Prefabricated reinforced concrete
Office rooms	Brick and Sat. w / b
Industrial premises	Prefabricated reinforced concrete
Commercial premises
Country ownership

Table 1 shows data on the estimated cost of repairs. These costs were determined based on the following data:

1). The cost of repairs as estimated by Moscow insurance companies:

Simple - $ 75 / sq. m.
Superior - $ 200 / sq. m.
Renovation - 400 USD / sq. m.

The given data are overestimated and do not reflect a clear gradation in the types of repairs.

2). The cost of repairs according to the data of construction companies in Moscow (used in the calculations):

Simple - $ 40:60 / sq. m.
Superior - $ 80: $ 140 / sq. m.
Renovation - 150: 350 USD / sq. m.
High quality - $ 400: $ 800 / sq. m and above (using natural materials - wood, stone :).

From the above table 1 it follows:

The smallest contribution to the market value of premises is made by removable wear and tear for industrial and office premises (apparently new owners always strive to equip office premises according to their design, and for industrial premises the relative cost of finishing is low);

The greatest contribution to the market value of premises is made by removable wear and tear for suburban estates, while the new finish significantly increases the market value of objects;

The secondary housing market (for example, 1-room apartments in typical panel buildings) shows a higher cost of finished premises;

Within the accuracy of calculations, the contribution of removable wear to the market value of premises should be proportionally taken into account for residential, commercial premises and suburban estates. For office and industrial premises, the contribution of removable wear is insignificant (Accounting " Disposable P. Wear " should be conducted with decreasing coefficients 0.2: 0.35).

2. Determination of the contribution of the general "Physical Depreciation" to the market value of real estate objects

Methods for calculating physical depreciation / 1 /:

regulatory (for residential buildings);
cost;
lifetime method, etc.

Regulatory methods are based on the use of various normative materials. An example is the "Rules for assessing the physical deterioration of residential buildings" (VSN 53-86) of the USSR State Construction Committee.

It should be noted (clause 1.1 VSN 53-86) that in this case "physical wear and tear at the time of its assessment is expressed by the ratio of the cost of objectively necessary repair measures that eliminate damage to a structure, element, system or building as a whole, and their replacement cost."

The question arises: how is the cost of repair costs related to the replacement cost related to the market value of the object?

The cost methods for determining physical depreciation are also based on the determination of direct costs for carrying out repairs.

Again, the question arises about the relationship between the cost of repair work and the market value of the object.

The life span method is based on the relationship between the effective life span of the structural elements of a building (“short lived” and “long lived”) or the entire building with their typical physical life.

Again, the question is: how are these ratios related to the market value of the property?

Consider the "Methodology for determining the accident rate of buildings" MGSN 301.03-97 (Table 3), where physical wear is determined by the method of life:

Let's pay attention to the "dilapidated" state, in which the cost of overhaul exceeds the replacement cost: under these conditions, the cost approach will give only the cost of the memory with individual improvements, and the comparative one will show a much higher cost. We will get the cost difference in approaches that has arisen due to incorrect accounting for the impact of wear.

It should be noted that in accordance with MGSN 301.03-97 "Methodology for determining the accident rate of buildings" clause 1.5 ": the emergency state of residential buildings or a separate structure, the wear of which affects the strength and stability of the entire building, can occur with physical wear of more than 70% for stone buildings and 65% for wooden houses: ".

It is well known that the cost approach and the comparative approach give similar values of value for new real estate, if costly approach correctly taken into account the entrepreneur's profit (or external wear) / 6 /.

Probably, as the facilities are operated, correct accounting of the impact of various types of wear and tear should also lead to similar results in the cost and market approaches.

The contribution of physical depreciation was roughly determined by the difference in market value between new objects and

objects with average service life (about 30% depreciation is determined by the life cycle method);

objects with service life close to the dilapidated state of buildings (wear is about 70%). To exclude the influence of functional and external wear and tear, market extraction was used for selected objects located in the South-Western Administrative District (apartments) and the Southern Administrative District of Moscow.

The liquidation value of "unusable" objects was determined in accordance with the recommendations of SN 436-72 "Approximate rates of output of materials obtained from the dismantling of buildings during their demolition."

Apartments were selected in 5-storey panel houses (in the South-West Administrative District, the cost of new apartments was taken according to the collection "Rway" No. 97, the cost of "dilapidated" apartments was accepted for 5-storey buildings in the New Cheryomushki districts planned for eviction). Representativeness of the sample - at least 20 samples.

The rest of the types of real estate objects (industrial, office, retail premises) were selected for the Southern Administrative District with the same conditions and representativeness of the samples, as for determining the contribution " Disposable P. Wear ", except for "dilapidated" objects "for reconstruction" (the representativeness of the samples dropped to 11:14 samples due to the small search base). Suburban estates were selected based on the above conditions. The selection was carried out in pairs.

Table 2.

Property object	Location placement	Cost (USD / sq. M) and relative cost (p.u.) at depreciation:
Property object	Location placement
1-room apartment
1-room apartment
Office rooms
Office rooms
Industrial premises
Industrial premises
Commercial premises
Commercial premises
Suburban possessions	25:40 km from MKAD
Suburban possessions	25:40 km from MKAD

From table. 2 it follows that we are dealing with a non-linear nature of the dependence of the market value of objects on physical wear and tear.

As an example, the graphs of reduction of the cost of apartments and office premises are given depending on their wear and tear, determined by the method of life.

To determine the nature of the dependence of the relative cost on the relative depreciation, data from several works were analyzed. For example, in work / 5 / it was proposed to make a discount to the cost in proportion to the square of the ratio of the time elapsed from the beginning of the object's existence to the ultimate service life.

To approximate the dependencies, linear and quadratic - linear regression formulas were used:

The presence and type of relationship between the relative cost of objects (OS) and the relative physical wear and tear (OI) was established.

Table 3 shows the approximating dependences and correlation coefficients.

Table 3.

	linear relationship		linear-quadratic dependence
		coeff. correl- tions		coeff. correl- tions
Apartments	OS = 1.24 - 0.91 * OI		OS = 1.10 - 0.92 * OI 2
Office rooms	OS = 1.14 - 1.02 * OI		OS = 1.02 - 0.91 * OI 2
Industrial premises	OS = 1.09 - 0.93 * OI		OS = 0.98 - 0.94 * OI 2
Commercial premises	OS = 1.10 - 0.90 * OI		OS = 0.97 - 0.91 * OI 2
Suburban possessions	OS = 1.15 - 0.98 * OI		OS = 1.05 - 0.99 * OI 2

As can be seen from Table 3, the most acceptable correlation coefficients (0.93: 0.97) were obtained with linear - quadratic approximation of the dependences. Linear dependences have low correlation coefficients (0.82: 0.85) and deviate.

The statistically obtained linear - quadratic dependencies "OS - OI" can be used to calculate the impact of physical wear and tear on the market value of objects both in the cost and comparative approach (when adjusting analogs).

3. Determination of the contribution of functional wear to the total market value of real estate objects.

The value expression of functional wear is the difference between the cost of reproduction and the cost of replacement, which excludes functional wear from consideration / 1 /.

Removable functional wear is determined by the cost of the necessary reconstruction, contributing to a more efficient operation of the property.

The question arises again: how are the costs of reconstruction related to the market value of the object?

Fatal functional wear is caused by outdated space-planning and / or structural characteristics of the assessed buildings in relation to modern building standards.

The cost of unrecoverable functional wear can be determined in two ways:

capitalization of losses in rent;

capitalizing on the excess operating costs required to keep the building in good order.

In this case, the method of direct market extraction is used - therefore, the direct proportionality of the contribution of irreparable functional wear to the market value of objects is beyond doubt, with the exception of the question of the mutual influence of wear.

The effect of removable wear was checked selectively for the following comparable objects:

3-room apartments (South Administrative District) in typical modern panel houses (the difference in the finishes of the "improved" and "European" type with a representative sample of more than 19 paired samples. The estimated cost difference is about $ 120 / sq. M., There are differences up to $ 98 / sq. m. (98/120 = 0,82 ).

Office premises of class B2 and C (the difference in air conditioning systems, "reception" services and security. The estimated difference in cost is about $ 38 / sq. M., - there is a tendency for small differences up to $ 21 / sq. M. ( 21/38 = 0,55 ) according to the mean values of paired samples (for the Southern Administrative District) with a representativeness of samples over 15 pairs, but the difference in cost is within the accuracy of measurements for the samples;

Industrial premises (difference in finishing for food production and non-food production. Estimated difference in cost - about $ 41 / sq. M. - no significant differences in market value exceeding the measurement accuracy could be found. Representativeness of paired samples - over 12 pairs;

Retail premises (the difference in finishing for trade in food and industrial goods. The estimated difference in cost is about $ 85 / sq. M. - there is a difference in cost up to $ 62 / sq. M. (62/85 = 0,73 ) by the mean values of the samples (SAO) with a representativeness of samples over 14 pairs.

Based on the data obtained, a table is built. 4:

Table 4.

Name	Number of "paired sales"	Estimated average estimated value of functional depreciation, (Srfi) USD / sq. m	Average difference in cost (Sfi) USD / sq. m	Sfi / Srfi ratio
3-room apartments
Office rooms
Industrial premises
Commercial premises

The coefficient of variation

In general, some sample data show that the effect of removable functional wear can be taken into account in proportion to the determined costs of its elimination, taking into account the reduction factor. In the first approximation, with a sufficient degree of reliability, this coefficient can be taken about 0,75.

4. Determination of the mutual influence of physical and functional wear.

Determination of the mutual influence of wear was carried out methodically as follows:

Option number 1 (taking into account the removable functional wear):

For objects new and close to new construction, there was a difference in simple finishing and European finishing (removable functional wear). Then, for similar objects, but with a sufficient degree of physical wear and tear, there was a difference in simple finishing and European finishing. The influence of external wear was, if possible, excluded. Based on the "formula 1", the difference in market value, taking into account the versatile finishes, should remain. Based on "formula 2" the difference in market value should decrease (which characterizes the mutual influence of wear and tear).

The markets of proposals for the sale of apartments, office and retail premises were investigated. The method of "paired sales" (offers for sale) was used.

Apartments: the relative values of one-room apartments were analyzed for the South-West Administrative District of Moscow. New apartments and apartments were investigated in the New Cheryomushki districts (but at a distance from Tsarskoe Selo).

Office premises: We analyzed the relative value of premises with an area of 112: 576 sq. m. in the Southern Administrative District of Moscow in multi-storey administrative and office buildings of class B2 (close to new) and class C (having large wear and tear).

Retail premises: We analyzed the relative costs of built-in and built-in-attached premises in residential buildings with an area of 256: 1112 sq. m. in the Southern Administrative District of Moscow for panel (close to new) and panel-block (having large wear and tear) buildings.

Table 5 shows the average results for the comparative samples.

Table 5.

Name	New, close to new, (Cn) USD / sq. m	Imagine sampling rate, pcs.	Having high wear (0.6: 0.7) (Cc) USD / sq. m	Imagine sampling rate, pcs.	Value Difference Ratio (Cc / Cn)
1-room apartments (South-West Administrative District)



Office premises cl. B2: C (YuAO)
Relative cost after "European-quality repair"
Relative cost after simple renovation,
Difference in relative value
Retail premises (South Administrative District)
Relative cost after "European-quality repair"
Relative cost after simple renovation,
Difference in relative value

As can be seen from Table 5, for all objects there is a general tendency to reduce the difference in the cost of finishing with an increase in physical wear and tear of objects. There is a clear mutual influence of wear.

Unfortunately, the author was unable to select a large representativeness of the samples (the search time for analogs was a priori limited to 3 months in the spring-summer 2003 season due to seasonal fluctuations in the prices of proposals) and to completely exclude the influence of individual factors on the relative costs in pairwise comparison (especially in terms of office space), so we can still talk about the trend of mutual influence of wear, or about a higher confidence level when using "formula 2".

Option number 2 (taking into account the unrecoverable functional wear).

The following assumption was investigated:

For offices in buildings of new and those close to new construction, there was a difference in the unit cost of space when they were located in the basement (semi-basement) part of the building and on the first floor. Then the same difference was determined for office premises in buildings that had significant (30:35%) wear and tear.

Table 6.

As can be seen from Table 6, there is a tendency for the mutual influence of wear.

GENERAL CONCLUSIONS:

1). The influence of physical and functional depreciation on the market value of real estate objects is complex, and to date there is no practically worked out theoretical model for describing the effect of individual depreciation on the market value of objects, as well as their mutual influence.

2). The tendency to the mutual influence of wear, noted in the article, suggests that the most probable for use (taking into account only physical and functional wear) is a formula that takes into account the mutual influence of wear (formula 2, given at the beginning of the article).

3). In the cost approach, when using the "standard" method and the "lifetime" method for calculating physical depreciation, it is advisable to introduce amendments that take into account the nonlinear nature of the relationship between depreciation and the market value of objects. Approximate formulas for taking into account the amendments are calculated for various types of real estate objects using the methods of mathematical statistics and are given in Table 3.

4). In the comparative approach, when correcting analogs, the approximate formulas for taking into account the corrections given in Table 3 can be used.

5). The article provides data on the impact of physical and functional wear and tear on the market value of real estate, requiring in-depth study, taking into account the effect of the entrepreneur's profit and external wear and tear.

6). Correct accounting of the impact of physical and functional depreciation on the value of real estate will help to obtain closer results in terms of cost and comparative approaches.

LIST OF USED INFORMATION SOURCES:

1. Real estate appraisal. / Under. ed. A.G. Gryaznova, M.A. Fedotova. - M., "Finance and Statistics", 2002, - 495 p.

5. "To the question of discounts on dilapidation", Statistical department of the Yaroslavl provincial zemstvo, 1913, issue 91 (www.valmaster.ru).

6. Yaskevich E.E. Determination of the entrepreneur's profit and external wear and tear for real estate objects, www.appraiser.ru, 28.03.2003, collection "RWay" No. 97, 2003

Economic losses from physical deterioration of the building. External (economic) deterioration of property complexes of industrial enterprises. Calculation methods (2). Methods for calculating external wear

Choosing a way to reduce the total wear and tear object commercial real estate in order to increase its market value ...

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