course hero which type of home is most apt to depreciate in value?

What is the purpose of depreciation?

Depreciation Expense shown on a company's income statement must be the same amount as the depreciation expense on the company's income tax return. The purpose of depreciation is to have the balance sheet report the current value of an asset. Nice work! You just studied 19 terms! Now up your study game with Learn mode.

Can a company depreciate equipment over 10 years?

A company may depreciate equipment over 10 years on a straight-line basis for its financial statements, but might use an accelerated method of depreciation over a shorter time period on its income tax return. Depreciation Expense is sometimes referred to as a non-cash expense.

What is an accelerated depreciation expense?

Depreciation Expense shown on the financial statements is a precise amount that is continuously refined. Over the life of an asset subject to depreciation, the accelerated method will result in more Depreciation Expense in total than the total Depreciation Expense using the straight-line method.

What factors can devalue a property by 25 percent?

Certain structures such as abandoned factories, hazardous waste sites or landfills nearby can also devalue a property by as much as 25 percent, according to Robert A. Simons of Cleveland State University. A writer since 1995, Christian Fisher is an author specializing in personal empowerment and professional success.

What causes a home to depreciate?

What Causes a Home's Value to Depreciate? Many factors affect home values nationwide including consumer confidence in the economy, demand for real estate, interest rates and job growth . Your home’s actual value, however, is dramatically affected by a combination of local factors that can cause its value to depreciate.

How much does a sex offender bring down the value of a house?

A registered sex offender living nearby can bring a house’s value down by as much as 17 percent , according to James Larsen of Wright State University. Certain structures such as abandoned factories, hazardous waste sites or landfills nearby can also devalue a property by as much as 25 percent, according to Robert A.

Why do foreclosures repel buyers?

Additionally, a high concentration of foreclosures in a neighborhood can repel buyers, especially if the properties aren’t maintained well, are vacant for too long, or are perceived as contributing to a rise in neighborhood blight.

Can a renovation increase the value of a house?

Damage to your home caused by mold or bug infestation, fire or weather damage, sewage problems, or structural problems especially in the basement or the roof will devalue a property. Renovations done properly can increase property value, but if you’re looking to sell, the costs of damage that hasn’t been properly corrected can eventually land on ...