Depreciated replacement cost method for financial reporting

The purpose of this UK guidance note is to draw attention to matters relevant to the use of the depreciated replacement cost (DRC) method of valuation.

The ‘cost approach’ and DRC method are regarded as synonymous terms; both are in common use around the world to describe a method of valuation of all types of assets. This guidance note also highlights the reporting requirements outlined in RICS Valuation – Global Standards 2017 – UK national supplement (RB UK) that are particularly relevant when the DRC method has been used.