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
Classroom electrician courses a 'waste of money'
Say experts from the Electrical Contractors’ Association.
Wellbeing in Buildings TG 10/2025
BSRIA topic guide updates.
With brief background and WELL v2™.
From studies, to books to a new project, with founder Emma Walshaw.
Types of drawings for building design
Still one of the most popular articles the A-Z of drawings.
Who, or What Does the Building Safety Act Apply To?
From compliance to competence in brief.
The remarkable story of a Highland architect.
Commissioning Responsibilities Framework BG 88/2025
BSRIA guidance on establishing clear roles and responsibilities for commissioning tasks.
An architectural movement to love or hate.
Don’t take British stone for granted
It won’t survive on supplying the heritage sector alone.
The Constructing Excellence Value Toolkit
Driving value-based decision making in construction.
Meet CIOB event in Northern Ireland
Inspiring the next generation of construction talent.
Reasons for using MVHR systems
6 reasons for a whole-house approach to ventilation.
Supplementary Planning Documents, a reminder
As used by the City of London to introduce a Retrofit first policy.
The what, how, why and when of deposit return schemes
Circular economy steps for plastic bottles and cans in England and Northern Ireland draws.
Reporting on Payment Practices and Performance Regs
Approved amendment coming into effect 1 March 2025.