- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 31 Dec 2020
Irrelevant costs in construction
An irrelevant cost is an accounting term used to refer to costs that do not relate to whether or not a particular business decision is made. Irrelevant costs will be incurred regardless of the decision.
By identifying the irrelevant costs in relation to a particular business decision, unnecessary cost information can be removed from the decision making process, leaving only costs that are relevant to the decision (i.e. 'relevant costs' that will be affected depending on which option is selected). Time and effort can be saved by distinguishing between relevant and irrelevant costs when analysing decision options.
Typically, irrelevant costs include:
- Sunk costs: Costs that have already been incurred, and so are independent of any decision that might be made in the future.
- Committed costs: Costs that will be incurred in the future but must be paid regardless of any business decisions.
- Notional/non-cash costs: Depreciation, amortisation, and so on.
 Related articles on Designing Buildings Wiki
Featured articles and news
TASC/CIOB study looks at post-pandemic struggles and trends.
The Government announces recalibrated goals.
ECA proposes strategies for the present and the future.
Paul Morrell to lead independent review of the construction products testing regime.
Standard will help employers foster wellbeing and manage psychosocial risks.
Global fire standards for safety of people and property.
An introduction to the 5 core principles of lean.
Can the profession use its skills to save the world from climate change?
How faulty science resulted in sanitation reform.
Improving facilities, accessibility and overall appearance.
Free download of TG 12/2021 available.
TESP works with The Youth Group to form skill sharing network.
Big tech collaborates on platform for the built environment.
Letter signed by 21 organisations sent to MHCLG.
Click the button to subscribe.