Principle “full recovery of costs” relates to tariff setting of water supply services in a manner to include all the costs associated with this type of service. Its basic intention is to achieve sufficient revenues to enable long-term stability and sustainability of a utility company providing the respective services.

Principle “full recovery of costs” is declaratively represented in the BiH practice. However, there is a problem related to understanding of the term “all costs”. In BiH practice, this principle if often implemented in a way to include operating costs and only a portion of real depreciation costs, since water supply and sewerage network and infrastructural facilities are not fully recorded in the fixed assets accounts. This way, the investment costs of maintenance and capital investments are neglected, which would serve for expansion of the network or service improvements through purchase of new infrastructure, as well as opportunity or indirect costs such as, for instance, costs of resources or possible environmental damage.