what is the current replacement cost method
(February 2015). The term replacement cost or replacement value refers to the amount that an entity would have to pay to replace an asset at the present time, according to its current worth. In the insurance industry, replacement cost or replacement cost value is one of several method of determining the value of an insured item. Replacement cost is the actual cost to replace an item or structure at its pre-loss condition. This may not be the market value of the item, and is typically distinguished from the actual cash value payment which includes a deduction for depreciation.