replacement cost risk
This query is : Resolved
bhargava sarma
(Querist)
18 June 2011
My question is
What is replacement cost risk?
can u please explain this with an example.
What is replacement cost risk?
can u please explain this with an example.
CA Harish Suwalka
(Expert)
19 June 2011
Replacement Risk
What Does It Mean?
What Does Replacement Risk Mean?
The risk that a contract holder will know that the counterparty will be unable to meet the terms of a contract, creating the need for a replacement contract.
Also known as "replacement-cost risk".
Investopedia Says
Investopedia explains Replacement Risk
For example, if a counterparty in an agreement fails to fulfill its contractual obligation, you will have to replace whatever it was the counterparty was supposed to deliver (e.g. an interest rate, a stock, a commodity, etc). Of course, there is a good chance that you won't be able to do this at the same price because the market will have moved since the contract was created.
link :https://www.investopedia.com/terms/r/replacementrisk.asp
What Does It Mean?
What Does Replacement Risk Mean?
The risk that a contract holder will know that the counterparty will be unable to meet the terms of a contract, creating the need for a replacement contract.
Also known as "replacement-cost risk".
Investopedia Says
Investopedia explains Replacement Risk
For example, if a counterparty in an agreement fails to fulfill its contractual obligation, you will have to replace whatever it was the counterparty was supposed to deliver (e.g. an interest rate, a stock, a commodity, etc). Of course, there is a good chance that you won't be able to do this at the same price because the market will have moved since the contract was created.
link :https://www.investopedia.com/terms/r/replacementrisk.asp
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Transfer of Physical Stock Between Two Proprietorship Concerns
- EPF ECR NEW RULES Sep 17th 2026
- Issuing of delivery challan by seller of goods
- Taxation of crypto futures in India Fy 2026- 2027
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
