Which methods require separation of accrued depreciation into various categories?

The observed condition and engineering breakdown methods require the separation of accrued depreciation into various categories because they focus on assessing the physical and functional aspects of a property.

In the observed condition method, an appraiser examines the physical state of a property and assesses how much the property's condition has deteriorated over time. This involves evaluating different components or systems of the property to determine how their current state impacts overall value. Each category of accrued depreciation, such as physical deterioration, functional obsolescence, and external obsolescence, must be analyzed separately to provide a precise valuation.

Likewise, the engineering breakdown method involves a detailed evaluation of a property's components based on their replacement costs and the remaining useful life. This method breaks down the depreciation into various segments — again considering physical, functional, and external factors — allowing the appraiser to calculate accrued depreciation accurately and reflect it properly in the overall appraisal.

The other methods mentioned do not necessitate such a detailed separation of depreciation categories; they may consider overall depreciation without breaking it down into specific causes or categories. Thus, the focus on specific types and sources of depreciation in the observed condition and engineering breakdown methods emphasizes the need for a more granular approach in assessing an asset's current value.