Essay in Depreciation Replacement Cost Method

RICS Valuation Teachers

The Lowered Replacement Cost Approach to Valuation intended for Financial Confirming Valuation Info Paper twelve

Produced in relationship with

Value Information Paper No . 15 The DRC Method of Value for Financial Reporting

Acknowledgements RICS want to thank Kingston University Institution of Surveying for their help out with preparation on this Paper. Components from the ‘International Valuation Specifications 2007' happen to be reproduced in this publication together with the permission of the International Valuations Standards Panel which keeps the copyright laws. This Valuation Information Paper is effective coming from 1 September 2007.

Posted by The Noble Institution of Chartered Surveyors under the RICS Books imprint Surveyor The courtroom Westwood Business Park Birmingham CV4 8JE UK No responsibility for damage or harm caused to any person performing or refraining from action as a result of the fabric included in this newsletter can be acknowledged by the writer, publisher or RICS. ISBN 978 you 84219 329 7 В© The Royal Institution of Chartered Surveyors (RICS) 06 2007. Copyright in all or part of this publication rests with RICS, and save by prior approval of RICS, no part or parts shall be reproduced by any means digital, mechanical, photocopying or otherwise, now known or to be devised. Typeset in Great Britain by Articles Design Limited, Reading


RICS Details Papers you 2 several 4 your five 6 several 8 on the lookout for 10 eleven 11 Launch What is DRC? When is DRC used? Valuer qualifications Deciding the conditions of engagement Assessing rc The site benefit of a specialized property Establishing the cost of the buildings and site advancements of a specialized property Determining depreciation Other considerations Final reconciliation Revealing Appendix A – Register Appendix B – PS 5. some, 5. 5 and a few. 6 iv 1 a couple of 3 five 6 7 8 twelve 13 18 19 20 21 3



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RICS Information Papers

This is a Value Information Conventional paper. Valuation Data Papers usually are meant to provide information and to summarize current practice for RICS members. The function of this paper is usually to give an indication on the method of issues that may well arise in the subject to which will it relates. It is, however , relevant to specialist competence for the extent that valuers should be up-to-date and really should have educated themselves of Valuation Details Papers in a reasonable moments of their promulgation. When an prosecution of professional negligence is made against the valuer, or disciplinary action is usually taken, the valuer will have to confirm that Valuation Information Paperwork have been regarded. No responsibility for loss or damage caused to the person operating or refraining from action as a result of the fabric included in this distribution can be approved by the author, publisher or perhaps RICS.



1 ) Introduction

1 . 1 The purpose of this Value Information Conventional paper is to provide supplementary information on the use of the declined replacement cost procedure (DRC) defined in IVS GN eight, The Cost Way of Financial Revealing – (DRC). The ‘Cost Approach' and depreciated replacement cost (DRC) will be regarded as identifiable terms; both are in common use around the World to spell out a method of valuation of all types of possessions. This information conventional paper also features the confirming requirements inside the RICS Evaluation and Valuation Standards which have been particularly relevant when the DRC method continues to be used. This Paper have been written especially with regard to practice in the United Kingdom. Nevertheless , valuers operating in other states might find the principles reviewed helpful and capable of adaptation with their local conditions. Section four of GN 8 identifies the relevant foreign accounting standards that permit the use of a DRC procedure. In the UK, private sector choices may comply with International Monetary Reporting Specifications (IFRS),...


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