When valuing a property loss on an actual cash value (ACV) basis, how does an adjuster generally calculate it?

On an actual cash value (ACV) basis, an adjuster generally values a property loss as the replacement cost of the damaged item minus depreciation (the reduction in value due to age, wear, and obsolescence). For example, a ten-year-old roof damaged in a storm would be valued at what a new roof costs, less depreciation for its age and condition. This contrasts with replacement cost value, which does not deduct depreciation (subject to policy terms). Determining appropriate depreciation is a key part of accurate ACV loss valuation. Understanding the ACV formula — replacement cost minus depreciation — is essential valuation content for the adjuster exam.