- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 28 Nov 2018
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.
 Find out more
 Related articles on Designing Buildings Wiki
Featured articles and news
A procurement method associated with Public Private Partnerships.
Infrastructure can use digital technology to encourage human growth.
Robotics and the construction industry.
ECA comments on CLC's three-phase recovery plan.
Their diplomatic and architectural history.
The origins of the six volume series.
Built to defend British waters, only to serve as pirate radio stations later.
Wellbeing to influence mix of home and office based working.
An introduction to cobotics.
Survey reports on outlook for the engineering sector.
A simple path to possible error avoidance.
Construction + technology = ConTech.
New low and high tech tools enter the marketplace.
Report looks at mental health in the built environment.
Radiant wall heating method to control rising damp.
What future infrastructure provision might look like.