Which method of estimating depreciation is considered the most detailed?

The observed condition (breakdown) method is considered the most detailed approach to estimating depreciation because it involves a thorough analysis of the property's physical condition. This method assesses the specific components of a property, including its materials, systems, and overall state, allowing appraisers to break down depreciation into different categories. By evaluating each element individually, the observed condition method provides a precise estimate of how much value each component contributes and the extent of any physical deterioration.

This detailed approach ensures that appraisers can account for various factors affecting a property's condition, such as wear and tear, outdated systems, or damage, leading to a more accurate and tailored estimate of depreciation. The other methods, while useful, do not offer the same level of specificity; for instance, the sales comparison method focuses primarily on market data, the economic age-life method uses general averages rather than specific components, and the capitalization of income method typically centers on income potential rather than detailed physical assessments.