What is the difference between the Net Adjustments and the Gross Adjustments calculation?

• A. The net adjustment considers the positive and negative numbers in adjustments and the gross adjustments uses the absolute value of the adjustments
• B. The net adjustment uses the absolute values
• C. Net equals gross
• D. Net excludes unadjusted items

Answer: (A)

When building the adjustments for a comparable sale, you have two ways to total them. Gross adjustments sum the magnitudes of each adjustment without regard to direction, using the absolute values. Net adjustments, on the other hand, add the adjustments with their signs, so positive and negative amounts can offset each other.

For example, if location adds 25,000, condition subtracts 15,000, and size adds 10,000, the gross total would be 50,000 (taking absolute values: 25k + 15k + 10k), while the net total would be 20,000 (25k − 15k + 10k). This shows how net reflects the actual directional effect on value, whereas gross shows total change magnitude regardless of direction.

So the statement that net adjustments consider positive and negative numbers and gross adjustments use the absolute value is the correct distinction.