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Replacement cost value (RCV)

What is replacement cost value (RCV)?

Replacement cost value is what it costs today to replace a damaged item with a new one of like kind and quality, without deduction for depreciation. Establishing RCV means pricing a current equivalent rather than the discontinued original, which on machinery and electronics requires research into dealer, rebuilder and secondary markets.

Establishing RCV on commercial property is research, not lookup. A 2016 press with a specific tonnage and bed size has no list price today; what it has is a market of dealers and rebuilders who sell equivalents, and the defensible figure is what one of them would charge. The same is true of a discontinued walk-in cooler or a server configuration nobody builds any more.

RCV is also the figure salvage is measured against: property with a high replacement cost and a live secondary market is where recovery is worth pursuing. Compare actual cash value.

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