replacement cost


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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 ?
Comparison of General Replacement Cost and Current Opportunity Cost Approaches
The cost of this may exceed the replacement cost of the other lesser quality of trim the carrier wants to replace it with.
In Insurance 101 we learned that "ACV equals replacement cost less depreciation" is written in stone.
Critics also call it a bait-and-switch to charge for replacement cost policies, and then hold back payment at the time of the claim.
Grange continued to reject the Petersons' claim for replacement costs in excess of $193,000.
Overhead and profit was a component of replacement cost and could be depreciated, but an additional amount should not be withheld.
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.
But just as you can buy replacement cost coverage for your home, you can do the same for your possessions, which would pay you the actual $20,000 it costs to replace the same or comparable items.
Replacement cost insurance does cover the cost of rebuilding.
Replacement cost settlements are complicated by the fact that some camp buildings are constructed from materials that are no longer available.
Replacement cost of Filmaster's "universal" decompression screw runs about $1200-1800.
The cost approach is a methodology that uses replacement cost as an indicator of FMV, assuming that a prudent investor would pay no more for a physical asset than the dollar amount for which he could replace the asset with a new one of like utility.