replacement cost
Price for equivalent
Replacement cost is the amount needed to replace an asset with one of equivalent function and condition.
In insurance, it determines claim payouts—replacing a destroyed item at current prices rather than its depreciated value: The policy covers replacement cost, not what you originally paid.
In accounting, it helps value inventory and fixed assets.
- depreciationAsset value reduction over time
- wear and tearGradual damage from use
- priceMonetary value assigned
- construction costsFunds for erecting structures
- deductibleOut-of-pocket threshold amount
value · estimate · dwelling · exclusions · home insurance · market price · labor · rebuild · building codes · property appraisal · materials · worth · coverage · indemnity · cash settlement · out of pocket · policy limit · impairment
- accounting termsassets, cash, expenses, equity, retained earnings
- costsoverhead
- damage claimsproperty damage, fire damage, water damage, storm damage, hail damage
- insurance claimsclaim form, claim filing, claim settlement, claims processing, claims adjuster
- insurance payoutsclaim, death benefit, life insurance payout, lump sum, final settlement
- property insurancehome insurance, renters insurance, building insurance, fire insurance, flood insurance
asset valuation methodology
replacement costsalvage value
Asset's worth when retired
residual value · scrap value · trade-in value · book value · fair market value