Suppose that an appraiser has come to the following conclusions in evaluating the subject property. Due to the dramatic shift in the perceived safety of the neighborhood, values of any residential properties in the area of the subject property have fallen by $10,000, on average. Due to the subject property's age, physical deterioration to the building accounts for an estimate of $50,000 in lost value. An evaluation of the floor plan reveals that it is quite obsolete relative to current homebuyer preferences. This has a detrimental effect on the value of the property that is estimated to be approximately $15,000. Based on your understanding of adjustments related to accrued depreciation, which of the following pertains to the adjustment for external obsolescence?
A) $10,000
B) $15,000
C) $50,000
D) $75,000

Question

Quizplus · Accepted Answer

The adjustment for external obsolescence is due to the neighborhood's perceived safety, which has led to a decrease in value for all residential properties in the area of the subject property, resulting in an adjustment of $10,000.

Suppose That an Appraiser Has Come to the Following Conclusions