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Topic: Business
Number of pages / Number of words: 5 / 1166
Essay's paper body

In crude terms replacement costs may be defined as the estimated amount that would have to be paid in order to replace the asset as the date of valuation. An advantage of replacement cost is that it focuses on the services the asset will provide rather than the precise physical asset.

However, there is an immediate flaw noted in its definition, where the costs have to be estimated...


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An advantage of replacement cost is that it focuses on the services the asset will provide rather than the precise physical asset.

However, there is an immediate flaw noted in its definition, where the costs have to be estimated. Estimation has to be carried out after reviewing the asset, the market and if an identical asset is still being traded in the market...


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