A depreciation report is considered as a financial document and would be mostly viewed as a guide for planning and maintenance and budget programs. This is one is not in any way a technical audit and it doesn’t pertain to detailed technical matters. However, this document has a business approach to the reserve fund management.
For your own understanding, a depreciation report may include, but may not be limited to the following:
- An inventory for all the common property which may include building systems.
- If available, a review of plans, prints and drawings which may include structural, architectural, mechanical, electrical, fire protection and many more.
- An examination of financial statements, budgets and condominium documents.
- An investigation of using construction cost services that are adjusted for time, cost data, quality and location of construction. If any of the data is incomplete, the contractors will be interview accordingly with respect to local conditions and costs that are similar to the repair projects.
- An estimate of the expected repair, maintenance and replacement costs for the common expenses that will be proposed for over 30 years.
- A financial forecasting, including at minimum, the three cash flow models for the Contingency Reserve Fund (CRF).