DPA Appraisal Fundamentals Workshop Test 2025 – 400 Free Practice Questions to Pass the Exam

The detailed age-life method is part of the Engineering Breakdown approach to measuring depreciation. This method involves a thorough analysis of an asset's components and their individual contributions to the overall value. It considers the physical condition and the remaining useful life of various components, rather than treating the asset as a single unit. This can involve extensive calculations and insights from engineering principles, which help in accurately determining how much value has been lost due to age and use.

In contrast, the other methods—like the Cost Approach, Market Approach, and Income Approach—use different techniques to assess value and depreciation. The Cost Approach assesses the current cost to replace an asset, the Market Approach evaluates based on comparable sales, and the Income Approach focuses on the revenue the asset can generate. None of these methods delve into the specific physical attributes and lifespan of individual components as thoroughly as the Engineering Breakdown does.