Replacement Cost Profit Definition

Replacement cost is conceptually similar to mark to market but implementation and practical issues are very different. Information and translations of replacement cost in the most comprehensive dictionary definitions resource on the web. An organization often chooses to replace its assets when the repair and maintenance costs increase beyond an acceptable level over a period of time.

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The second-quarter replacement cost or RC profit was 553 million compared with a loss of 2.

Replacement cost profit definition. Replacement cost profit and underlying replacement cost profit. If I were a BP shareholder Id be pissed. It would be normal for an integrated company to report Net Income.

If inventory levels have not changed then replacement cost profit should be the same as profit calculated using LIFO costs. Replacement Cost Operating Profit or Replacement Cost of sales Operating Profit. They sure dont make it easy.

Underlying profit is a calculation made internally by a company to show what it believes is a more accurate reading of its profit position. Replacement cost insurance If you have replacement cost insurance your claim will cover the lesser cost of restoring items to their original condition or buying new items of like kind and quality to the ones lost. An accounting practice in which liabilities and assets are recorded on a balance sheet according to the cost of replacing them rather than the original amount spent on the liabilities or assets.

In other words it is the cost of purchasing a substitute asset for the current asset being used by a company. The cost of replacing an asset in the case that it is damaged or destroyed. This practice is intended to take into account current prices when calculating a companys value.

RCOP is operating profit calculated and stated on the basis of the replacement cost of purchases rather than historical cost. If the replacement cost being calculated is of a damaged asset then that cost relates to the asset in pre-damaged condition. Replacement cost is a common term used in insurance policies to cover damage to a companys assets.

It is also called the replacement cost. Ive spent about five minutes chasing the answer and Ill be damned if I can tell you. The amount of revenue earned depends on two things - the number of items sold and their selling price.