What are the three general categories resulting in accrued depreciation?

The correct answer highlights the three categories of accrued depreciation in real property appraisal: functional obsolescence, economic obsolescence, and physical deterioration.

Functional obsolescence refers to a loss in value due to factors that make a property less desirable, often linked to design or layout issues that do not meet current market preferences. For example, a home with an outdated floor plan that is not conducive to modern living standards may experience functional obsolescence.

Economic obsolescence encompasses depreciation caused by external factors that negatively impact the property's value. This can include changes in the surrounding neighborhood, such as increased crime rates, the construction of undesirable facilities nearby, or shifts in the overall economy that reduce demand for the property type.

Physical deterioration is the most direct form of depreciation, resulting from the wear and tear of the property over time. This includes damage from neglect, weather effects, or simple aging of materials and systems in the property, leading to a decline in its physical condition.

The other options provided contain terms that do not accurately represent the three recognized categories of accrued depreciation. While deferred maintenance refers to an accumulation of necessary repairs that have not been performed, it is not categorized as a type of depreciation in the same sense as the options in the correct response. Similarly