Methods of Adding Depreciation
With Simsol, there are two different ways to add Depreciation. A Depreciation Table may be set up, or the Depreciation can be set per item.
Using a Depreciation Table will allow you to set up a set of standards for how you are going to depreciate your estimate. This can be done by using the Scope, Trade, and Economic Age variables to choose when and how much to depreciate. A Depreciation Table is meant to be added to an estimate before the Areas and Damages are created, but can be added after with a few additional steps.
To set up a Depreciation Table, first, highlight the claim in the Claims Grid and click the Show Highlighted Claim File button.
Next, select the Estimate Preferences section, this is the section of the Claim Enclosures Tree that shows a golden padlock next to the Estimate Name.
Then, click on the Dep. Table button from the top of the Estimate Preferences section.
This will open the Local Depreciation Table Editor. We now have choices on how to set up the depreciation table. On the left, we have options to set up our table by either Scope, Trade, Scope with Age, or Trade with Age. Scope refers to the different operations available in Simsol (i.e. removing an item, adding an item, paint/finish, ect.). Trade will break down your depreciation by Major Trades and Subtrades. Adding Age as a factor to either method will account for depreciation based on the economic age of the item. These options will yield a blank table where you can enter what depreciation you want in each category.
The Scope table will allow you to set up your Depreciation based on the scope you are applying. Input a whole number into the Depreciation % field for a given scope. This will apply that figure to every item operating under that scope. In the example below, you see that Replace is being depreciated by 15%. This will cause any items that are being Replaced to incur 15% Depreciation.
The Trade table allows you to set up your Depreciation based on specific Trades and Subtrades within Simsol. Selecting an option under Major Trade/Classification will allow you to set a Depreciation % for each individual Subtrade.
If you want to this to apply to certain scopes, use the Depreciate Scopes section. Check a scope if you want to depreciate it, uncheck if you want that scope to stay at full replacement value.
Scope with Age
Scope with Age tables work the same as Scope tables, but factor in the Economic Age. First, enter the Economic age of the structure in the field in the bottom left.
Next, the setup will be very similar to a regular Scope table, but you now have the option of choosing separate depreciation percentages for 1st Year, Additional Years, and the Max Amount of Depreciation.
Trade with Age
Trade with Age tables work the same as Trade tables, but factor in the Economic Age. First, enter the Economic age of the structure in the field in the bottom left.
Next, the setup will be very similar to a regular Trade table, but you now have the option of choosing separate depreciation percentages for 1st Year, Additional Years, and the Max Amount of Depreciation. It is recommended that you utilize the Simsol Table if you use this option. The Simsol Table will pre-fill all Major Trades/Subtrades with industry-standard depreciation rates. This table can be accessed by selecting the 'Simsol Table' button in the upper right-hand corner.
You may also choose to have Depreciation only apply to the Material cost, and exclude any Deprecation on Labor or Equipment costs. To do this, check the 'Materials Only' checkbox in the bottom left.
Using the Simsol Table
All the aforementioned tables depreciate at 0% by default. Simsol also provides a predefined Trade with Age table. To set this up, click the Simsol Table button.
A warning message with a disclaimer will appear, read the disclaimer and click Yes.
From here, you can choose to depreciate everything (Labor, Materials, and Equipment), or Materials Only. If you only want to depreciate the material costs of an item choose Simsol Building Dep. Table Mat Only, otherwise choose Simsol Building Dep. Table. Click OK, then click Yes to add the table. Now, the Simsol Table has been added.
Finalizing the Depreciation Table
Now that we have added a table, click Done at the top right.
If you have added this table prior to building out your estimate, you should now have a depreciation table applied. When you add a Line Item, the item is populated with the appropriate depreciation.
If you have already created your Areas and Damages you will see to see the Global Changes with a $0 net change. You will need to go to the Areas, individually, and update their Economic Age.
To do this, navigate to the Scope of Damage and right click on the first area.
From the menu, select Economic Age and input the Age in the text field and click OK. You do not need to 'Update the Estimate Default Economic Age'.
This will automatically calculate and apply the Depreciation for items in that Area. Repeat this process for each Area.
Depreciation by Item
The second method involves using a Line-Item Override to enter the depreciation for an item. It is often used in a situation where the depreciation only needs to be changed on one, or a few, items.
To do this, highlight the claim in the Claims Grid and click the Show Highlighted Claim File button.
Navigate to the Scope of Damage, highlight the area that contains the item we want to depreciate, and click the Scope button. This will open the Virtual Scope Sheet (VSS).
Next, click the List button at the top to change the view. You can now see a list of Line Items that have been added to the Area. Right click on the item we want to depreciate and choose 'Override' from the menu.
This will bring up the Line Item Override window. Here you can edit many factors of the Line Item, including Depreciation. There are two fields where you can calculate the Depreciation: Dep % and Dep $.
The Dep % field will allow you to put a percentage of Depreciation. The Dep $ field will allow for a decimal dollar amount. These fields are mutually exclusive, if you enter a figure in one the other will auto-populate. Once you've entered the Depreciation, click Done in the top right to save these changes.