What formula is used to solve for replacement cost new less depreciation?

To determine the replacement cost new less depreciation, the appropriate formula involves subtracting accrued depreciation from the replacement cost new. This reflects the concept that to find the current value of an asset, one must account for the loss in value due to wear and tear, obsolescence, or other factors that contribute to depreciation over time.

The formula captures the basic principle of valuation in real property, where the initial value (replacement cost new) is adjusted by the amount of value that has been lost (accrued depreciation). This adjustment allows appraisers to estimate the current worth of a property based on its current condition rather than its original construction costs. Thus, the correct approach is to start with the replacement cost new and subtract the accrued depreciation to arrive at a more accurate and realistic valuation.