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Last edited 10 Nov 2020
Types of costs for buildings
The idea of ‘cost’ in relation to buildings is not a simple one, as there are a wide range of different types of cost. This article provides a brief summary of those types, with links to sources of additional information.
Capital costs are those costs associated with one-off expenditure on the acquisition, construction or enhancement of significant fixed assets including land, buildings and equipment that will be of use or benefit for more than one financial year.
Building operating costs are the costs incurred gy the day-to-day operation of the building, which might include; utilities costs, maintenance and repairs, general and administrative expenses and so on.
Life cycle costing is an economic assessment of the discounted net present value of life cycle costs, carried out using profiles of current and future costs and benefits. There is increasing emphasis on life cycle costing to ensure all costs are taken into account during the decision-making process, not just those for capital investment.
Generally this refers to the actual, total construction cost calculated at the end of the project, but it may also refer to the cost of a specific contract, or to costs incurred over a defined period. This contrasts with cost estimates, or target costs, which are calculations of the cost that is expected, or the cost that should be achieved.
 Other types of costs
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