2.3.3.3. Cost Approach.This portion of the report should be in the form of computational data, arranged in sequence, beginning with reproduction or replacement cost. The report should state the source (book and page—including last date of page revision—if a national service) of all figures used. Entrepreneur’s profit, as an element of reproduction or replacement cost, must be considered and discussed and if applicable, should be derived from market data whenever possible. If the appraiser retained the services of a contractor or professional cost estimator to assist in developing the reproduction or replacement cost estimate, this data should be referenced and the estimator’s report included in the addenda of the appraisal report. 

The dollar amount of depreciation from all causes, including physical deterioration, functional obsolescence, and economic or external obsolescence shall be explained and deducted from reproduction or replacement cost. See Section 1.5.3 for a discussion concerning the preferred methods of estimating depreciation under these Standards.