Business Glossary

current cost to replace an asset with an identical asset. Typically, there is an allowance for depreciation.

the cost of exact duplication of a property as of a certain date. Reproduction differs from replacement in that replacement requires the same functional utility for a property, whereas reproduction is an exact duplication.

Example: In the cost approach to property valuation, the appraiser estimates the reproduction cost of the subject structure. Various deductions are then made to account for depreciation in value from the time the building was constructed. These deductions reflect the fact that the building is not new, may not be of modern design, and may have suffered adverse effects due to its location.

cost of exact duplication of a property, real or personal, as of a certain date. Reproduction differs from replacement in that replacement requires the same functional utility for a property, whereas reproduction is an exact duplication. Compare replacement cost .