Because real estate usually declines in value faster than accounting depreciation,it is reasonable to assume that the property has zero value at the end of the lease term.

Question

Quizplus · Accepted Answer

Real estate typically appreciates in value over time, contrary to many other assets that depreciate. Accounting depreciation does not always accurately reflect market value changes, and properties often retain or increase in value rather than declining to zero.

Because Real Estate Usually Declines in Value Faster Than Accounting