Replacement cost method

Replacement cost method,

Definition of Replacement cost method:

  1. Business valuation method in which its replacement cost (instead of its liquidation value) is considered which is usually higher than the book value (because depreciation is not taken into account). Liabilities are deducted from the replacement cost to arrive at the value of the business. Also called replacement value method.

Meaning of Replacement cost method & Replacement cost method Definition