What term is used to describe the difference between reproduction cost new and market value as of the date of the appraisal?

The term that accurately describes the difference between reproduction cost new and market value as of the date of the appraisal is accrued depreciation. Accrued depreciation represents the loss in value of a property due to factors such as physical wear and tear, functional obsolescence, or external economic factors.

In the context of appraisal, reproduction cost new refers to the cost of constructing an exact replica of the property using the same materials and construction methods. However, the market value reflects what a buyer is willing to pay for the property at a given time, which is often less than the reproduction cost due to various influences that lead to depreciation.

Understanding accrued depreciation is essential in valuation because it ensures that appraisers account for the various elements that may reduce property value over time, thereby providing a more accurate assessment of the property's worth in current market conditions.