Replacement cost accounting

Updated: Aug 20, 2021

A simple form of current cost accounting where the adjustments are largely concerned with fixed and current assets which are brought into account not at their historical cost but in terms of their replacement cost. This type of inflation accounting is partly in use already where stocks are charged to production on a L.I.F.O. basis and where fixed assets are frequently revalued and depreciation charged accordingly.

Reference: The Penguin Business Dictionary , 3rd edt.

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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.