Which type of depreciation addresses curable issues related to design and function?

Functional depreciation specifically relates to the loss in value of an asset due to shortcomings in design or functional usability that can be corrected or improved. It addresses issues that can be remedied, such as outdated features or inefficient layouts, which may negatively impact the property’s utility or appeal to potential users.

This type of depreciation emphasizes aspects that can be "cured," meaning that by making modifications or upgrades, the value of the property can potentially be restored or increased. Examples might include installing more efficient systems, reconfiguring a workspace to improve flow, or bringing facilities up to current standards.

In contrast, other types of depreciation focus on different aspects; physical depreciation pertains to wear and tear or physical deterioration of the property, economic depreciation considers external economic factors impacting value, and structural depreciation relates to fundamental structural issues. Therefore, functional depreciation distinctly captures the essence of curable design and functional deficiencies.