Relevant cost
Relevant cost, also known as differential cost, is an accounting term that is used to refer to costs that pertain to a particular decision. This means that those costs could be avoided depending on whether the decision is taken. Relevant costs will differ between the alternative options being considered.
By identifying the relevant costs that relate to a particular decision, cost information that is common to all options, and so not relevant to the decision can be removed; these are referred to as irrelevant costs. Time and effort can be saved by distinguishing between relevant and irrelevant costs when analysing options.
Relevant costs are typically considered in two categories:
- Future cost: The cost that will be incurred in the future as a result of the decision (If this future cost does not change based on the decision then it is an irrelevant cost).
- Opportunity cost: The amount that will be lost in terms of missed opportunities as a result of the decision.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
UKCW London to tackle sector’s most pressing issues
AI and skills development, ecology and the environment, policy and planning and more.
Managing building safety risks
Across an existing residential portfolio; a client's perspective.
ECA support for Gate Safe’s Safe School Gates Campaign.
Core construction skills explained
Preparing for a career in construction.
Retrofitting for resilience with the Leicester Resilience Hub
Community-serving facilities, enhanced as support and essential services for climate-related disruptions.
Some of the articles relating to water, here to browse. Any missing?
Recognisable Gothic characters, designed to dramatically spout water away from buildings.
A case study and a warning to would-be developers
Creating four dwellings... after half a century of doing this job, why, oh why, is it so difficult?
Reform of the fire engineering profession
Fire Engineers Advisory Panel: Authoritative Statement, reactions and next steps.
Restoration and renewal of the Palace of Westminster
A complex project of cultural significance from full decant to EMI, opportunities and a potential a way forward.
Apprenticeships and the responsibility we share
Perspectives from the CIOB President as National Apprentice Week comes to a close.
The first line of defence against rain, wind and snow.
Building Safety recap January, 2026
What we missed at the end of last year, and at the start of this...
National Apprenticeship Week 2026, 9-15 Feb
Shining a light on the positive impacts for businesses, their apprentices and the wider economy alike.
Applications and benefits of acoustic flooring
From commercial to retail.
From solid to sprung and ribbed to raised.
Strengthening industry collaboration in Hong Kong
Hong Kong Institute of Construction and The Chartered Institute of Building sign Memorandum of Understanding.
A detailed description from the experts at Cornish Lime.