ISO 15686-5:2017

INTERNATIONAL ISO
STANDARD 15686-5
Second edition
2017-07
Buildings and constructed assets —
Service life planning —
Part 5:
Life-cycle costing
Bâtiments et biens immobiliers construits — Prévision de la durée
de vie —
Partie 5: Approche en coût global
Reference number
©
ISO 2017
© ISO 2017, Published in Switzerland
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ii © ISO 2017 – All rights reserved

Contents Page
Foreword .v
Introduction .vi
1 Scope . 1
2 Normative references . 1
3 Terms and definitions . 1
3.1 Costs . 1
3.2 Analysis/measures . 3
3.3 Elements of calculation . 4
3.4 Other terms . 5
4 Principles of life-cycle costing . 6
4.1 Purpose and scope of life-cycle costing . 6
4.2 Costs to include in LCC analysis . 6
4.2.1 Defining scope of costs included in the analysis . 6
4.2.2 Classification of costs . 7
4.3 Typical analysis at different stages of the life cycle . 9
4.4 Analysis based on client requirements and the intended use of the results .10
4.4.1 Scope based on client requirements .10
4.4.2 Decisions informed by LCC analysis .11
4.4.3 Strategic level project planning — Evaluation of strategic alternatives .12
4.4.4 System and detailed decision level — Integrating life-cycle costing into
design appraisals .13
4.4.5 Service life planning — LCC plans .14
4.4.6 Major repairs, replacements and adaptations .14
4.4.7 End of life .15
4.5 Data for analysis at different stages of the project life cycle .15
4.5.1 General.15
4.5.2 Benchmark LCC analysis .15
4.5.3 Detailed LCC analysis .15
4.6 Cost variables .16
4.7 Calculating cost variables and the form of future costs analysis .16
4.8 Discounting costs to present values .17
4.9 Approval and validation .17
4.10 Reporting LCC analysis .17
5 Setting the scope for LCC analysis .17
5.1 Relevance and importance of setting parameters for the use of life-cycle costing .17
5.2 Service life, life cycle and design life .18
5.3 Period of analysis .18
5.4 Cost variables .19
5.4.1 Acquisition costs .19
5.4.2 Operation, maintenance and replacement costs .19
5.4.3 Costs at disposal .21
5.4.4 End-of-life residual valuations .21
5.4.5 Discount rate .22
5.4.6 Inflation .22
5.4.7 Taxes and subsidies .22
5.4.8 Changes in costs over time .23
5.4.9 Energy and utilities costs .23
6 WLC variables used in some investment appraisals .23
6.1 General .23
6.2 Externalities .23
6.3 Costs related to environmental impacts .24
6.4 Social costs and benefits .24
6.5 Contribution of the construction works to sustainability and sustainable development .24
6.6 Intangibles — Impact on business reputation, functional efficiency, etc. .25
6.7 Future income streams .25
6.8 Financing costs .25
7 Decision variables — Basis of calculating costs .26
7.1 Real costs .26
7.2 Nominal costs .26
7.3 Discounted costs .26
7.4 Present value .27
7.4.1 General.27
7.4.2 Net present value (NPV) or net present cost (NPC) .27
8 Uncertainty and risks .28
8.1 General .28
8.2 Identification of the causes of uncertainty and risks .28
8.3 Monte Carlo analysis and confidence modelling .29
8.4 Sensitivity analysis and modelling the effects of changing key assumptions .29
9 Reporting .30
9.1 LCC analysis — Presenting the results and supporting information .30
9.2 Reporting costs .31
9.3 Approvals and audit trail .31
Annex A (informative) Worked examples — Analysis techniques used in life-cycle costing .32
Annex B (informative) Measures of comparison in whole life costing/life-cycle costing .35
Annex C (informative) Demonstrating sensitivity analysis .37
Annex D (informative) Graphical representation of WLC/LCC analysis.39
Annex E (informative) Example of levels of LCC analysis .41
Bibliography .42
iv © ISO 2017 – All rights reserved

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