Cost approach: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Link with Income approach page.) |
imported>Doug Williamson (Make wording clearer.) |
||
Line 1: | Line 1: | ||
''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. | |||
Revision as of 14:59, 1 August 2015
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.