effective age vs economic life
A single-family residence has an actual age of 15 years, an estimated effective age of 10 years, and a remaining economic life of 30 years. The replacement cost is $83,500. A frame garage was added to the property ten years ago and has an effective age of 10 years with a remaining economic life of 15 years.The replacement cost is $15,500. The accrued depreciation for both main and accessory structures is: Effective age + remaining economic life = economic life of building. 2  Effective age/Economic life x Replacement Cost = Accrued Depreciation. 3  Effective age may or may not reflect actual age, since maintenance, upgrading, design, or other factors may affect the aging process.