COST APPROACH REEXAMINED

Abstract

This project deals with the weaknesses of the Cost Approach as it is perceived by both academicians and practitioners, and recommendations for change and improvements have been presented in several areas. Specifically, the applicability of the Cost Approach in arriving at the Open Market Value; the arguments on reproduction and replacement bases; the problems in making depreciation adjustments; comparisons with the Market Approach; and the use or lack of use of the Cost Approach in the local scene are dealt with in this dissertation. This study is particularly relevant in Singapore today because of the demand by decision makers for improvements in the way valuation is carried out. In relation to this, the local scene and local valuation practices has formed the backdrop of discussion throughout the work.