Actual Cash Value (ACV) is an insurance term referring to the amount equivalent to the replacement cost of damaged or lost property, minus depreciation. It is a measure sometimes used as a substitute for market value in insurance claims.
The expenditure on goods and services required to carry out the operations of an organization. Different methods of defining cost are used in accounting to reflect various aspects of financial reporting and decision making.
The cost convention refers to the basis used for recording costs charged against profit during an accounting period, which can be based on historical cost, current cost, or replacement cost.
Current cost refers to a cost calculated to take into account current circumstances of cost and performance levels. It represents the amount required at current prices to purchase or manufacture an asset, possibly adjusted for inflation.
Current-Cost Accounting (CCA) is an accounting approach focusing on the operating capability of a business, ensuring assets are valued to prevent business loss upon their deprivation. This method highlights adjustments for inflation and operational capacity, differentiating holding gains from operating profits.
Current-value accounting is a method that values assets based on their current market value, taking into account changes in specific prices rather than general price levels. This technique is essential for providing a more precise and timely reflection of an entity's financial situation.
In current-cost accounting, the deprival value of an asset corresponds to the lower value between its replacement cost and its recoverable amount, which is the higher value between its net realizable value and net present value.
Insurable value refers to the cost of total replacement of destructible improvements to a property; it is often based on replacement cost rather than market value.
An accounting method of presenting financial information on different bases such as historical-cost convention, modified historical-cost convention, and replacement cost, in a columnar format to facilitate better understanding by users.
NIFO cost is a method of valuing units of raw material or finished goods issued from stock by using the next unit price at which a consignment will be received for pricing the issues.
Property Depreciation Insurance coverage ensures replacement of damaged or destroyed property on a new replacement cost basis without any deductions for depreciation. This coverage is equivalent to replacement cost property insurance.
Replacement cost is the cost of replacing an asset, either in its present physical form or as the cost of obtaining equivalent services. This valuation method helps companies determine the expense of acquiring new or similar assets.
Reproduction cost refers to the cost required for an exact duplication of a property, whether real or personal, taking into account the original materials, design, and workmanship as of a specific date. It is distinct from replacement cost, which involves replicating the functional utility of a property rather than creating an exact copy.
Tobin's Q Ratio, devised by US economic analyst James Tobin, measures the impact of intangible assets on business value by comparing the market value of a business to the replacement cost of its assets.
Value in use is the present value of an asset's future cash flows derived from its continued use and eventual disposal, used primarily in impairment testing and asset valuation assessments.
