Valuation techniques that reflect the amount that would be required currently to replace the service capacity of an asset is an example of:
A) the fair value approach.
B) the income approach.
C) the cost approach.
D) the market approach.

Question

Quizplus · Accepted Answer

The cost approach estimates the value of an asset by determining the cost to replace the service capacity or functionality of the asset. This approach is often used for valuing assets that are not frequently bought and sold in the market or have unique characteristics that make it difficult to use other valuation methods.

Valuation Techniques That Reflect the Amount That Would Be Required