More ▼

Cavan Institute


Join date: Jul 10, 2022


Expenditure method. As we already know from the previous chapter, price, cost and value are different concepts. If the comparative method, most likely, with the right selection of similar objects in characteristics, gives you the price for selling and buying at the moment, then the cost method will help to study the cost of obtaining such an object in the property. Let me remind you that cost is the monetary expression of labor costs and the monetary costs of obtaining goods

Let's take two plots of land as an example. Plot A costs 1,000,000 rubles and has the following characteristics:

- 10 acres;

- supplied electricity;

– located from station Z in 10 minutes on foot;

- all documents have been received, the site has been correctly surveyed and is correctly registered in the cadastral register.

Plot B costs 800,000 rubles and has the following characteristics:

- 10 acres;

– located from station Z in 7 minutes on foot.

If we used the comparative method for evaluation, then area B c would look more attractive. But with the expense method, we calculate the cost of obtaining documents for site B and the cost of supplying electricity. Suppose it turns out that electricity will cost us 180,000 rubles, since we need to buy poles, wires, pay for work and connect to the network. It also turns out that putting all the documents in order requires us to run around for six months and pay a lawyer of 150,000 rubles.

education and training board
Solas Logo
Department of education logo
Irich Government logo
European Union Funded