Obsolescence

Functional wear and tear includes a decrease in the value of property associated with the inconsistency of design and planning solutions, construction standards, design quality, and manufacturing materials with modern requirements for these items.

The amount of removable wear and tear is determined as the difference between the potential value of the building at the time of its assessment with updated elements and its value at the date of assessment without updated elements (the difference between the cost of reproduction of the building and its replacement cost).

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

Disadvantages that require replacement or modernization of elements are items 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 used at other facilities (revisable residual value).

Irremovable functional wear and tear is caused by outdated space-planning and/or structural characteristics of the buildings being assessed relative to modern construction standards. A sign of irreparable functional wear and tear is the economic inexpediency of spending on eliminating these deficiencies. In addition, it is necessary to take into account the market conditions prevailing at the date of the assessment to ensure that the building is adequately architecturally suited to its purpose.

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

* capitalization of losses in rent;

* capitalization of excess operating costs.

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

In this case, the selected analogues should not have signs of irreparable functional wear identified in the object being assessed. In addition, the total income generated by the property complex as a whole (building and land) and expressed in rent must be divided accordingly into two components. To allocate part of the income attributable to the 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 and the total sales price of the property complex.

Determination of impairment caused by irreparable functional wear and tear due to an outdated space-planning solution (specific area, cubic capacity) is carried out by the method of capitalizing losses in rent.

Calculation of irreparable functional wear and tear by capitalizing the excess operating costs required to maintain the building in good condition can be done in a similar way. This approach is preferable for assessing the irreparable functional wear and tear of buildings that are distinguished by non-standard 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.

External wear

External or economic wear and tear - depreciation of an object due to the negative influence of the external environment on the object of assessment: location, market situation, easements imposed on a certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc. Although external wear cannot be eliminated in most cases, it can sometimes resolve itself due to a positive change in the surrounding market environment.

The following methods can be used to assess external wear:

* method of capitalization of losses in rent;

* method of capitalization of excess operating costs;

* sales comparison method.

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

The sales comparison method consists of identifying a market assessment of the accumulated depreciation of an object by comparing its replacement cost with the current sales prices of comparable objects.

Stages of method implementation:

1. Selection of recent sales of objects similar to the property being assessed in terms of the nature of the improvements, adjusting their prices and generating information to determine the replacement cost of the building;

2. Determination of the cost of a plot of land for each comparable property;

3. Determining the prices of buildings taking into account depreciation by excluding the cost of land plots from the sales prices of comparable objects;

4. Calculation of the current replacement cost of each comparable object;

5. Determining the amount of accumulated depreciation of comparable buildings by subtracting their prices taking into account depreciation from the current replacement cost of the same buildings;

6. Determination of the average percentage of depreciation of comparable buildings for its transfer to the assessment object.

The advantage of the method lies in the objectivity of its results, since by comparing sales, the appraiser only identifies the market reaction to the aging of the property and environmental changes.

The disadvantage of the method is the impersonality of the identified type of wear, that is, in the absence of the possibility of differentiation by types and types of wear, which limits the use of this method in property management. In addition, the method is quite labor-intensive, since it requires calculations not only to compare sales, but also to determine the value of land plots and the replacement cost of improving all objects.

General concepts and terminology

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 (depreciation) under the influence of various factors over time. As the facility is used, the parameters characterizing the structural reliability of buildings and structures, as well as their functional compliance with current and, especially, future use associated with human life, gradually deteriorate. In addition, the value of real estate is no less influenced by external factors caused by changes in the market environment, the imposition of restrictions on certain uses of buildings, etc.

Depreciation (I) is usually measured as a percentage, and the monetary expression of depreciation is depreciation (O).

Depending on the reasons causing the depreciation of a property, the following types of wear and tear are distinguished: physical, functional and external.

Classification of depreciation of real estate objects

Each type of wear is characterized by its division: removable and irremovable. In the most general case, removable wear is called wear, the elimination of which is physically possible and economically feasible. At the same time, economic feasibility lies in the fact that the costs incurred to eliminate one or another type of wear and tear should help increase the value of the object as a whole.

When all designated types of wear and tear are identified, they speak of the total accumulated wear and tear of the property. In monetary terms, the total wear and tear is the difference between the replacement cost and the market price of the property being valued. Based on the essence of these definitions, it can be argued that the total accumulated wear and tear is, first of all, a function of the lifetime of the object. Taking this circumstance into account, let us consider the essence of the main evaluative concepts characterizing this indicator:

Physical life buildings (FZ)- determined by the period of operation of the building, during which the condition 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 buildings. Physical life ends when the object is demolished.

Chronological age (CA) - this is the period of time that has passed from the date the facility was put into operation until the date of assessment.

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

Effective age (EA) - determined on the basis of the chronological age of the building, taking into account its technical condition and the economic factors prevailing on the valuation date that influence the value of the assessed object. Depending on the operating characteristics of the building, the effective age may differ from the chronological age up or down. In the case of normal (typical) operation of a building, the effective age is usually equal to the chronological age.

Remaining Economic Life (REL) of a building is the period of time from the date of valuation until the end of its economic life.

The subjectivity of determining such indicators as economic life and effective age requires the appraiser to be quite highly qualified and have considerable practical experience. Depreciation in valuation practice must be distinguished in meaning from a similar term used in accounting (depreciation). The meaning of depreciation in accounting is the regular distribution of initial investments in an object (book value) for the entire period of its operation in accordance with the norms of depreciation charges for the “full” restoration of fixed assets. Estimated depreciation is one of the main parameters that allows you to calculate the current (actual) value of an object of assessment on a specific date.

Physical deterioration

Physical wear and tear is the 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 activity.

The following methods for calculating the physical deterioration of buildings are distinguished:

normative (for residential buildings);

cost;

lifetime method.

Standard method for calculating physical wear and tear

The normative method for calculating physical wear and tear involves the use of various normative instructions at the interindustry or departmental level. As an example of such instructions, one can name the “Rules for assessing the physical deterioration of residential buildings” VSN 53-86 of Gosgrazhdanstroy (State Committee for Civil Construction and Architecture under GOSSTROE of the USSR. Moscow, 1990), used by the Bureau of Technical Inventory for the purpose of assessing the physical deterioration of residential buildings during technical inventory, planning major repairs of the housing stock, regardless of its departmental affiliation.

These rules describe the physical wear and tear of various structural elements of buildings and their assessment.

The physical wear and tear of a building should be determined using the formula:

Fф = ,

Where Ff- physical wear and tear of the building, (%);

Fi- physical deterioration i th structural element (%);

Li- coefficient corresponding to the share of replacement cost i th structural element in the total replacement 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 the building (in%) are usually taken according to aggregated 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 estimate cost.

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

due to its “normativity”, it initially cannot take into account the atypical operating conditions of the object;

labor-intensive application due to the required detailing of the structural elements of the building;

inability to measure functional and external wear;

subjectivity of specific weighing of structural elements.

Cost method for determining physical wear and tear

Physical wear and tear at the time of its assessment is expressed by the ratio of the cost of objectively necessary repair measures to 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 depreciation is to determine the costs of recreating building elements.

The described methodology allows you to calculate the wear and tear of elements and the building as a whole immediately in cost terms, which is more preferable than other methods for calculating physical wear and tear. In addition, since the impairment calculation is based on the reasonable actual cost of bringing worn-out items to “substantially new condition,” the result under this approach can be considered fairly accurate. Among the disadvantages inherent in this method, it is necessary to note the mandatory detail and accuracy of calculating the costs of repairing worn-out elements of the building.

Determination of physical deterioration of buildings using the lifespan method

Based on the essence of the previously discussed basic evaluative concepts characterizing the total accumulated wear and tear of a building from the point of view of its operation time, it can be argued that physical wear and tear, effective age and economic life are in a certain ratio. This relationship can be expressed by the following formula:

I(%)=(EV/FJ)(100 – (EV/OV+OSFJ))/100, (1)

Where AND(%)- wear as a percentage;

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

VF- typical physical life span;

OSFJ- the remaining period of physical life.

In this case, physical depreciation can be calculated both for individual elements of the building with the subsequent summation of the calculated impairments, and for the building as a whole. Sometimes, for approximate calculations of wear and tear, appraisers can also use a simplified formula that takes into account the relationship between the chronological age and physical life of the building:

I(%) = (HV/VF)/100 , (2)

Where AND(%)- wear as a percentage;

VF- typical physical life span.

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

The percentage of depreciation of elements or the building as a whole calculated in this way can be translated into monetary terms (depreciation):

O= BC *(I/100),

Where AND- wear as a percentage;

Sun- replacement cost.

As noted earlier, physical wear and tear is divided into removable and irreparable. In addition, in practice, elements of a structure that have removable and irreparable physical wear are divided into long-lived and short-lived.

Short-lived elements- elements that have a shorter lifespan than the entire structure (roofing, plumbing equipment, etc.).

For long-lived elements, the expected lifespan is comparable to the lifespan of the entire structure (foundation, load-bearing walls, etc.).

Removable physical wear of short-lived elements

The cause of removable physical wear and tear is the natural wear and tear of building elements over time, as well as careless operation. In this case, the selling price of the building is reduced by the corresponding impairment, since the future owner will need to carry out “previously deferred repairs” in order to restore the normal operational characteristics of the structure (routine repairs of the interior, restoration of areas of leaking roofing, etc.). This assumes that the items are restored to a “virtually new” condition.

So, removable physical wear and tear in monetary terms is defined as the “cost of deferred repairs,” i.e. costs of bringing the object to a condition equivalent to the original one.

Unrecoverable physical wear of components with a short lifespan

Unrecoverable physical wear of short-life components represents the cost of restoring these rapidly wearing components and is determined by the difference between the replacement cost and the amount of removable wear multiplied by the ratio of the chronological age and the physical life of these elements.

Removable physical wear of elements with a long lifespan

Removable physical wear and tear of elements with a long lifespan in cost terms can be determined by the reasonable costs of its elimination, similar to the reversible physical wear and tear of elements with a short lifespan.

Irremovable physical wear of long-life elements

Irreparable physical deterioration of long-life elements is determined by the difference between the replacement cost of the entire building and the sum of removable and irreparable deterioration, multiplied by the ratio of the chronological age and the physical life of the building.

Functional wear

Signs of functional wear and tear in the building being assessed, as a rule, are the non-compliance of its space-planning and/or design solutions with modern standards, including various equipment necessary for the normal operation of the structure in accordance with its current or intended use.

Depending on the physical possibility and economic feasibility of eliminating the causes that caused functional wear, it is divided into removable and irreparable. The cost expression of functional wear is the difference between the cost of reproduction and the cost of replacement, since the calculation of the latter, based on its definition, obviously excludes functional wear from consideration.

Removable functional wear

Removable functional wear and tear is usually determined by the cost of necessary reconstruction to facilitate more efficient operation of the property.

Reversible functional wear is considered to be caused by:

shortcomings that require adding elements,

deficiencies requiring replacement or modernization of elements,

super improvements.

Deficiencies that require addition include elements of the building and equipment that do not exist in the existing environment and without which it cannot meet modern performance standards. Depreciation due to these items is measured by the cost of adding these items, including their installation.

Disadvantages that require replacement or modernization of elements include items that still perform their functions, but no longer meet modern standards (water and gas meters, etc.). Depreciation for these items is measured by 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 elements 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 (revisable residual value).

Super-improvements include positions and elements of the structure, the availability of which is currently inadequate to modern requirements of market standards. Removable functional wear and tear in this case is measured as the current replacement cost of the “over-improvement” items minus physical wear and tear, plus the cost of dismantling and minus the salvage value of the dismantled elements.

An example of over-improvement would be a situation where the owner of a house, adapting it for himself, made some changes for his own convenience (investment value) that were not adequate from the point of view of a typical user. These include, for example, the redevelopment of the usable area of ​​​​premises for a specific use, determined by the owner’s hobbies or his occupation. Removable functional wear in such a situation is determined by the current cost of bringing the changed elements to their original state. In addition, the concept of over-improvement is closely related to the segment of the real estate market, where the same improvements can be considered both appropriate for a specific segment and excessive from the point of view of a typical user.

Unrecoverable functional wear

Irremovable functional wear and tear is usually caused by outdated space-planning and/or structural characteristics of the buildings being assessed relative to modern construction standards. First of all, the economic inexpediency of spending money on eliminating these shortcomings allows us to judge the sign of irreparable functional wear. In addition, it is necessary to take into account the market conditions prevailing at the date of assessment in order for the building to be adequately architectural for its purpose.

However, depending on the specific situation, the cost of irreparable functional wear and tear can be determined in two ways: both as a capitalized loss in rent, and as a capitalization of excess operating costs necessary to maintain the building in proper order. To determine the necessary calculation indicators (rental rates, capitalization rates, etc.), adjusted data on comparable analogues are used. In this case, the selected analogues should not have signs of irreparable functional wear identified in the object of assessment. In addition, the total income generated by the property complex (building and land) as a whole and expressed in rent must be divided into two components accordingly. To allocate part of the income attributable to the 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 and the total sales price of the property complex.

External (economic) wear and tear

External depreciation is the depreciation of an object due to the negative influence of the external environment in relation to the object of assessment: the market situation, easements imposed on a certain use of real estate, changes in the surrounding infrastructure, legislative decisions in the field of taxation, etc. External wear and tear of real estate, depending on the reasons that caused it, in most cases is irreparable due to the unchanged 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:

capitalization of rental losses;

comparative sales (paired sales);

economic life span.

The calculation of external wear and tear using the method of capitalizing losses in rent is carried out similarly to the calculation of functional irreparable wear and tear.

External (economic) depreciation is the depreciation of an object due to the negative influence of the external environment in relation to the object of assessment: the market situation, easements imposed on a certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc. External wear and tear of real estate, depending on the reasons that caused it, in most cases is irreparable due to the unchanged 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:

• - a method of capitalizing losses in rent; a comparison of rental income from two properties, one of which is negatively affected. When applying this approach, the amount of losses for real estate as a whole is first determined, and then the share of losses per building is allocated from it, which is capitalized based on the established capitalization rate for buildings.
• - the paired sales method requires a sufficient number of real estate sales for comparison that differ from the one being assessed in location and environment. The difference in the cost of two comparable objects, one of which has signs of wear and tear from external influences, allows us to draw a conclusion about the amount of external wear and tear of the object being valued.
• - the effective age method is based on an examination of the structures of the object being valued and the hypothesis that the effective age (EA) relates to the economic life period (ELL) as accumulated wear and tear (I) relates to the total cost of reproduction (FRC):

I = (EV/SEJ)*PSV(8)

Effective age is the life expectancy of a building, estimated by an expert appraiser based on the physical condition, design, and other factors affecting the value, as of the valuation date.

Economic life - the life expectancy of a building during which improvements contribute to the value of the property in excess of the cost of improvement, i.e. when wear is removable.

After determining the total accumulated depreciation, the appraiser, to obtain the final value of the property, adds the difference to the cost of the land plot by the cost of reproduction (replacement) of the property.

Brief overview of the main methods used in assessing land plots:

• 1. Method of capitalization of ground rent;
• 2. Method of correlation (transfer);
• 3. Method of development (development, intended use);
• 4. Residue technique for land;
• 5. Method of direct comparative analysis of sales;
• 6. Distribution method;
• 7. Isolation method.

Determining the value of a land plot by the method of capitalization of land rent (income approach) consists of capitalizing income received from rental payments. Due to the fact that the practice of leasing private land is still not widespread in our country, mainly state and municipal land plots are leased. Rent payments in this case are regulated by the standard price of land, which is inadequate to its market value, therefore, in practice, the use of the method of capitalization of land rent does not give sufficiently objective results.

The correlation (transfer) method consists of determining the relationship between the value of a land plot and the improvements built on it. The total cost of the built-up plot is estimated, the cost of buildings and structures is subtracted from it, and the cost of the land plot is obtained. The matching method is appropriate when there are insufficient comparable sales of vacant land plots.

The development (development) method is a simplified model of investment analysis of the best use of a land plot, which has no analogues in comparable sales. As a rule, these are non-standard large land masses for which the issue of their rational development is being resolved. Such cases are quite common in Russian valuation practice.

The land balance technique is a universal valuation method, but it is most effective in the absence of information on comparable sales of vacant plots and the availability of information on the profitability of the property. In this case, the cost approach is used to estimate the cost of improvements and, using the capitalization ratio for the building, the portion of net operating income attributable to it is determined. The remainder of the net operating income of the entire property is converted into an appraised value using the land capitalization rate.

Section 1. Main production assets

Chapter 3. Depreciation of fixed production assets and its impact on the value of the objects being valued

3.4. External wear and tear (economic obsolescence) of fixed production assets and principles for its determination

It should be recalled that external wear and tear (economic obsolescence) is the loss of value of an object, which is caused by the negative influence of external factors. Here are some examples.

1. Inflation in the country depreciates money, and therefore the real value of the object.

2. The deterioration of the financial capabilities of the population leads to the need to sell properties at reduced prices.

3. The deterioration of the quality of labor and raw materials does not allow the production of expensive products.

4. Inconvenient location:

At home (far from the metro, school, swimming pool, etc.) sharply reduces the cost of apartments in this building and vice versa;

Stores located in the city center and on the periphery may be valued differently;

Offices located in a prestigious location (business center) and on the periphery cost differently;

Enterprises with good access roads, proximity to the labor force and poor access roads (or none at all) or remote from the places of residence of the labor force have different chances in the labor market.

5. The inconvenient design of the machine increases the number of maintenance personnel, the amount of electricity used, and therefore the operating costs of maintaining the machine, which increases its cost.

6. When the appraiser, during a site inspection, identifies problems associated with the state of the environment, he must find out the nature and extent of pollution; take into account possible options for eliminating the causes of environmental pollution, that is, determine the possibilities of eliminating the source of pollution, and then express all this in cost form and take it into account in assessing the value of the object.

In general, the calculation of external wear of technical devices, depending on the available information, can be carried out in different ways. For example,

1st option. Financial resources for eliminating external unfavorable factors are equal to the amount of external wear and tear of the assessed object.

2nd option. Paired sales of comparable technical devices are analyzed. In this case, the formula is used

T1 – the price of an object that has signs of external wear,

T2 - the price of an object that does not have signs of external wear,

Rts - the difference in price characterizes the amount of external wear of the object being valued.

3rd option. Rental income from comparable properties is compared. The following formula is used:

Ka - capitalization of income received

object A,

Kb - capitalization of income received

object B,

Рд - the difference in income characterizes the amount of external wear and tear of the valuation object.

The appraiser must express all these external factors, independent of the object being valued, in rubles and subtract the resulting amount from the total gross value of the object.

Previous

The structural restructuring of the economy of Uzbekistan, which began in the early 1990s, created the prerequisites for the formation of market relations in all spheres of economic activity.

The consistent implementation of the privatization policy by the Government of the Republic of Uzbekistan led to the emergence of private owners of property rights, first for residential, and then for public and industrial purposes. The legally ensured transferability of property rights became the basis for the emergence of a new and unique product for Uzbekistan - real estate, machinery and equipment, intangible assets and other types of property.

With the establishment and development of appraisal activities and the private market for construction services in Uzbekistan, the importance of appraisal results obtained using the cost approach, as the most frequently used in appraisal practice, increases. In our opinion, at the moment, the main problems that appraisers have to face when performing cost approach procedures is the lack of a generally accepted methodology for calculating the determination of external wear and tear and the inclusion of adjustments to the value for this sign of wear.

Below, this article provides brief information about the reasons for the occurrence and accounting of external wear for assessment using the cost approach, based on foreign sources, as well as from the experience of conducting assessments in the assessment company "MULK-BAHO", specializing mainly in the assessment of buildings and structures.

Valuation of real estate objects recommends the use of a cost approach when assessing: residential properties, commercial properties, industrial facilities, unfinished construction, unique objects and special-purpose objects, in other cases.

The cost approach has the following advantages:

• the presence of a methodological and regulatory framework (estimated standards, Collections of aggregated indicators of replacement cost, Collections of aggregated indicators of estimated cost, standard projects, etc.);
• takes into account the design features and physical condition of the object being assessed;
• no restrictions on use.

When valuing real estate using the cost approach, Appraisers face certain difficulties, for example:

• the value of the valuation object determined using the cost approach in some cases differs several times from the value of the object determined using the comparative and income approach;
• the sources of information used to evaluate the cost approach are outdated (at present, economic conditions have undergone significant changes compared to the conditions that existed during the compilation of the Collections of aggregated indicators of replacement cost in price levels by 1991);
• there is no unified methodology for determining the amount of investor profit (when determining the full replacement cost);
• When determining the total accumulated wear and tear with the calculation of physical wear and tear, not many problems arise, since in Soviet times a regulatory framework for construction, depreciation standards and other indicators that can be used to assess the physical condition of a building were developed, then with the calculation of functional and external wear and tear the Appraisers many questions arise.

External wear

What is external (economic) wear and tear? External wear and tear is the reduction in the usefulness of a building as a result of changes in external conditions.

When assessing real estate objects, the following definition of external (economic) wear and tear is given:

"Economic wear and tear occurs as a result of the impact of external factors on a property. External factors include: changes in the economy that affect the demand for goods and services, the profitability of enterprises; changes in the situation in the real estate market; changes in legislation, financing conditions, etc. ".

External wear can be caused by:

• general decline of the area, city in which the object is located;
• actions of government or local administration;
• other changes in the employment, recreation, education, etc. markets.

A significant factor influencing the amount of external wear is the close proximity to natural or artificial objects: wastewater treatment plants, restaurants, gas stations, railway stations, hospitals, schools, industrial enterprises, etc.

External wear, in contrast to physical and functional wear and tear, is always considered irreparable, because the amount of costs allocated to eliminating external factors is significantly high.

"Economic wear and tear is measured using one of the following methods:

a) capitalization of loss of income due to external influences (capitalization of losses in rent);

b) comparison of sales of similar objects with and without taking into account external influences."

Method for capitalizing loss of income due to external influences(capitalization of rental losses) is based on a comparison of rental income of two properties, one of which is subject to external wear and tear. Capitalization of income losses from comparing these two objects will characterize the amount of external depreciation.

Method for comparing sales of similar objects is based on an analysis of price information on recently sold similar objects (two comparable objects are sold on the real estate market, one of which has signs of external wear, the other does not. The difference in prices allows us to draw a conclusion about the amount of external wear of the property being valued).

The use of these methods in a standard form is difficult for the following reasons:

• difficulty in obtaining reliable market information (especially for the sales comparison method);
• methods involve comparing objects in two states: without changing external conditions and with changing external conditions.

In recent years, the following methods for determining external wear have been proposed:

- Method based on operating load analysis .

In this case, the amount of external wear is determined by the following formula:

Uext. = 1 - Kn,

Where, Uext.- the amount of external wear, %;

n- braking coefficient or scale factor.

To determine the operating load, the current level of production volume of the facility is compared with design indicators, with the maximum historical production volume or production capacity at the time of assessment.

This method has a main drawback: underutilization of an asset can be caused not only by the influence of the external environment (i.e. external wear and tear), but also by factors such as inadequate management, functional obsolescence of the asset, etc.

- Method based on the impact of the macroeconomic environment .

Macro factors are the general state of the industry, the reasons for which are a decrease in demand for products, a decrease in government subsidies and other factors leading to a decrease in profitability in this industry. The same can be said about the economic situation in the area. The situation in the industry as a whole may be quite good, but in industries such as agriculture, food industry, etc. in some areas there may be a crisis. Enterprises serve local markets. A decrease in effective demand in a given area affects the profitability of these enterprises, and, accordingly, their value.

In the comparative and income approaches, this is taken into account through the corresponding industry coefficients or directly through the income stream of a particular enterprise. In the cost approach, this should be taken into account through external wear.

Thus, as can be seen from the above, assessing external wear and taking it into account in assessment practice is a requirement of the time, and its assessment requires certain marketing research.

Aziz Muratov

specialist appraiser LLC "MULK - BAHO».

phone: 144-58-65, 158-11-21.

fax: 144-58-65.