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What is a Depreciation Report (Reserve Fund Study)?

A Depreciation Report (Reserve Fund Study) is first and foremost a financial planning process that is intended to analyze, assess and plan the funding for Contingency Reserves.  The purpose of this analysis is to identify the funding needs within the Contingency Reserve Fund, in order to make recommendations to ensure that sufficient funding is available for future repairs and replacement of the common building elements or assets of a Strata Corporation.

The Institute of Real Estate Studies defines a Depreciation Report (Reserve Fund Study) as a plan for the “provision of resources for major repairs and replacements of building components and improvements, or common elements, over time to ensure adequate funding of all future capital expenditures when required.”

An effective Depreciation Report (Reserve Fund Study) should: