Cost approach
What is Cost approach?
Source: Methodology
How it shows up in a Study
The cost approach starts from the duties recorded at intake: what the shareholder-employee actually does, and for what period. Each duty priced against survey compensation carries its own source, like every other figure in the Study. Which approach carries weight in a file is a question about the facts, and the Study records that reasoning rather than asserting a result.
What a Reviewer checks
Most of the risk sits in the time split. A Reviewer checks that the listed duties match the work the person does, that the share of time given to each one is supported by something in the file, and that every adjustment has a written rationale. The source itself names that allocation as the method's weak point, so a thin record there deserves the closest look.
Public source
IRS, Reasonable Compensation Job Aid for IRS Valuation Professionals (2014). The document states on its own face that it is not an official IRS position and may not be cited as authority for a legal position. Source: https://www.irs.gov/pub/irs-lbi/Reasonable%20Compensation%20Job%20Aid%20for%20IRS%20Valuation%20Professionals.pdf
Not tax advice.