According to the established valuation practice, when valuing businesses (companies, business units and\nother retail assets) the income and market approaches are generally applied. The use of the cost approach\nis rather limited and is normally employed when valuing small companies (those that have not reached their\nbreakeven point or those having little historic data) and holding groups. The article suggests modernization of the\ncost approach, aiming to broaden its scope of use through the integration of some income approach elements.\nThe article provides a description of this valuation technique, which the author calls Assets Replacement\nCost Method (ARCM). It relies on the replacement concept, according to which the investor will not pay more\nfor an asset than the total cost necessary to create an asset of equal utility, be it by means of acquisition\nor construction. This method is based on the cost approach and incorporates some elements of the income\napproach, which allows optimizing the strengths and weaknesses of both methods. From the author�s point of\nview, this method can be classified as hybrid, similar to the Economic Value Added (EVA) and Edwards-Bell-\nOhlson (EBO) valuation approaches.
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