Replacement Cost Method Definition:

Replacement cost is the cost at which, on the date of issue of the material, there could be purchased another lot of material identical to that whose issue is being priced. Under replacement cost method, the issues are priced at the market rate on the date of its issue.

Other Related Accounting Articles:

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• Last In First Out (LIFO) Method Definition
• Under pricing
• Weighted Average Method Definition
• Direct Material Price Variance
• Sinking Fund
• Specific Cost Method Definition
• First In First Out (FIFO) – Materials and Inventory Costing Method
• Different Types of Dividends
• What are Stock Repurchases?