Average Depreciation Percentage
Updated
by
Arianne G.
To calculate the average line item depreciation percentage, we must look at the assignment line items in Xactimate.
First, the Depreciation amounts for each line item are summed. Then, costs such as labor minimums (LM) and overhead and profit (O&P) are subtracted (costs such as LM and O&P do not appear in the screenshot below). This gives us a subtotal. Next, the Retail Cost Value (RCV) for each line item is summed to get the line item RCV total. The subtotal is then divided by the line item RCV total to get the Avg Depreciation %:
((Sum of line item Depreciation amounts) – (O&P, LM, etc.)) / (Sum of line item RCV amounts) = Avg Depreciation %
Using the figures in the screenshot below, and assuming LM and O&P combined equals 15.00, we can calculate that the Avg Depreciation % for this assignment is 6%:
((0.56 + 0.62 + 46.04 + 21.95 + 37.80) – 15.00) / (6.87 + 4.43 + 266.42 + 182.52 + 997.25) = 0.063 = 6%
In order for a line item to be included in the calculation, it must be a non-zero depreciation line item and have both a Depreciation and RCV amount.
As stated earlier, costs such as labor minimums and overhead and profit are subtracted in the calculation for the Avg Depreciation % column. When viewing the Estimate Depreciation Usage report, it is important to note that these costs are not subtracted in the calculation for the Estimate Value column or the Total Depreciation column.
