What is ACTUAL CASH VALUE (ACV)?
For a building, this figure is determined as a replacement cost less depreciation. The calculation of the replacement cost is developed by building cost manuals which include the material and labor costs for construction in that geographical area. The depreciation figure that is subtracted from the replacement cost is based upon various depreciation guides and typically includes a visual inspection of the property. Factors that affect a building’s ACV include: year of construction, type of construction, repairs made to the building over its life, and the present condition. For contents, ACV is the replacement cost less depreciation for the article that is damaged, destroyed or stolen.
For a building, this figure is determined as a replacement cost less depreication. The calculation of the replacement cost is developed by building cost manuals which include the material and labor costs for contruction in that area. The depreciation figure that is subtracted from the replacement cost is based upon various depreication guides and typically includes a visual inspection of the property. Factor that affect a buildings ACV include: type of construction, year built, present condition, and repairs made over its life. For contents, ACV is the replacement cost less depreciation for the artlice that is damaged, destroyed or stolen.
