Cost approach: Difference between revisions
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==See also== | ==See also== | ||
*[[Expected cash flow]] | |||
*[[Fair value]] | |||
*[[IFRS 13]] | *[[IFRS 13]] | ||
*[[Income approach]] | *[[Income approach]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
Latest revision as of 18:16, 21 July 2022
Financial reporting - fair value.
IFRS 13 Fair Value Measurement defines a 'cost approach' as a valuation technique that reflects the amount that would be required currently to replace an asset with a comparable asset which would provide the same future stream of services.
A cost approach to fair value identifies the price that would be received for the asset based on the cost to a market participant buyer to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence.
This is sometimes known as the current replacement cost.
