Arabian Journal of Business and Management Review

ISSN: 2223-5833

Open Access

Yuriy V Kozyr

Central Economics and Mathematics Institute of Russian Academy of Sciences,
47 Nakhimovsky prospect, Moscow

  • Research Article
    Business Valuation Based on Assets Replacement Cost

    Author(s): Yuriy V KozyrYuriy V Kozyr

    According to the established valuation practice, when valuing businesses (companies, business units and other retail assets) the income and market approaches are generally applied. The use of the cost approach is rather limited and is normally employed when valuing small companies (those that have not reached their breakeven point or those having little historic data) and holding groups. The article suggests modernization of the cost approach, aiming to broaden its scope of use through the integration of some income approach elements. The article provides a description of this valuation technique, which the author calls Assets Replacement Cost Method (ARCM). It relies on the replacement concept, according to which the investor will not pay more for an asset than the total cost necessary to create an asset of equal utility, be it by means of acquisition or construction. This method is .. Read More»


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