STRAIGHT LINE DEPRECIATION     

This is the simplest model. It assumes that the building will depreciate at a constant annual rate until the end of its life  when, it will have zero value. 

EXAMPLE

Suppose that valuer expects that the building will have an economic life of 10 years and its replacement cost new is 2 000 000. According to this model the building will be worth 0 in 10 years at a depreciation rate of 10% per annum (200 000):

STRAIGHT LINE DEPRECIATION

YEAR	

VALUE		

DEPRECIATION

0		

2 000 000		

200 000

1		

1 800 000		

200 000

2		

1 600 000		

200 000

3		

1 400 000		

200 000

4		

1 200 000		

200 000

5		

1 000 000		

200 000

6		

  800 000		

200 000

7		

  600 000		

200 000

8  		 

 400 000		

200 000

9		

  200 000		

200 000

10	         	 

  0