A best-practice depreciation report’s physical analysis of a development is translated into a financial benchmark.
The component inventory provides the raw-data for the 30 year projection, to which is added the point-in-time benchmark analysis, used to assess the monies available and required for planned expenditures.
The projection is common to all scenarios and includes unique, repeated, sequenced and phased expenditures.
At the point-in-time of the assignment, the projection provides the position of the reserve fund based on its current needs and the efforts of successive strata councils since construction.
A projection is at the same time an estimated forecast of a future situation based on the study of present trends and the representation of anticipated trends based on these estimates.
Having stakeholders buy into thinking more than one year at a time is a drastic improvement, despite the fact that scenarios built on many fluctuating variables make a 30 year projection sketchy at best.
That is why the Strata Property Act (SPA) has mandated that the reports be revised every three years, which is in effect a valid horizon for managing anticipated fiscal-year scheduled inspections and expenditures.