Reproduction cost

Reproduction cost is the expenditure required to reproduce an asset at current prices. The level of reproduction is assumed to be exact - involving the same materials and specifications as were used for the original asset. The concept is used in the insurance industry to assist in determining the price to charge to insure against the destruction of a customer's asset.

Reproduction cost differs from replacement cost, which pertains to the cost of an asset that can provide the same functionality as the original asset without necessarily replicating its features.