replacement cost


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Related to replacement cost: Replacement cost accounting, Replacement cost insurance

Replacement cost

Cost to replace a firm's assets.

Replacement Value

The cost of replacing an asset in the case that it is damaged or destroyed. That is, the replacement value changes according to the market value of the asset. An individual or company may buy a replacement cost insurance policy to cover the replacement value. It is also called the replacement cost.

replacement cost

The current cost of replacing an asset with an equivalent asset.

replacement cost

the cost of replacing a FIXED ASSET (such as an item of machinery) or STOCK. Unlike HISTORIC COST – the original cost of acquiring an asset – replacement cost makes due allowance for the effects of INFLATION in increasing asset prices over time. Prudence requires that stocks are valued in a company's accounts at historic or replacement cost, whichever is the lower. See also REVALUATION PROVISION, INFLATION ACCOUNTING, APPRECIATION, definition 1.

replacement cost

the cost of replacing an ASSET (such as an item of machinery). Unlike HISTORIC COST - the original cost of acquiring an asset - replacement cost makes due allowance for the effects of INFLATION in increasing asset prices over time. See also INFLATION ACCOUNTING, APPRECIATION 2.

replacement cost

(1) In appraisal,the cost to erect a new building substantially similar to the current one. (2) In insurance,the cost to purchase a new item substantially similar to the one damaged, destroyed,or stolen. Contrast with fair market value.

References in periodicals archive ?
A taxpayer within the scope of this revenue procedure and which is using the replacement cost method on Jan.
The gap in standard coverage underscores the fact that replacement cost insurance merely replaces the building with the same or similar material.
The alternative is to insure on an actual cash value basis, which basically is a depreciated replacement cost value.
3] A cost indicator of market value, as calculated by either the reproduction or the replacement cost approach, is based on this Principle of Substitution.
Adding e2Value's Pronto allows carriers to include a reliable, accurate Replacement Cost Estimate while actually decreasing the keystrokes for agents and consumers.
In addition to expanding commercial prefill, 360Value now provides insurers the ability to estimate replacement costs for heavy commercial and industrial buildings.
The Hartford Financial Services Group has begun using 360Value, a replacement cost tool developed by ISO subsidiary Xactware Solutions, to estimate replacement costs for all of its homeowners insurance business.
It doesn't seem fair for me to pay for replacement cost coverage in my homeowners' policy if I only get actual cash value upfront.
The court concluded that a promise made by an insurance agent or broker, in order to calculate the full replacement cost of a client's dwelling, imposed an obligation to fulfill the promise and found that the failure allowed the insured to receive damages for negligence and for violation of Washington's Consumer Protection Act (CPA).
Homeowners insurance is based on replacement cost -- the cost of rebuilding a home after it's destroyed -- not market price," Olmsted explained.
Agents who go onto the insurer's Web site can link to the HomeValue Web site and receive a replacement cost value for new risks, Madigan said.
The implication is that investors in this market are reluctant to pay more than replacement cost, as they worry the residual value of the property will not meet re turn expectations.