The invention discloses a distribution network power equipment cost accounting method based on a life cycle cost theory. At present, the distribution network power equipment market is imperfect, and therefore the cost of distribution network power equipment cannot be easily deduced according to reasonable market transactions. The method comprises the steps of 1 constitution and estimation of the early-stage cost, wherein the early-stage cost comprises the distribution network power equipment purchase cost and the distribution network power equipment mounting and debugging cost; 2 constitution and estimation of the middle-stage cost, wherein the middle-stage cost comprises the operation cost and the maintenance cost; 3 constitution and estimation of the final-stage cost, wherein the final-stage cost comprises the processing cost generated by scrapping of the distribution network power equipment after the life cycle is finished and the environment protection cost; and 4 constitution and estimation of the total cost of the distribution network power equipment, wherein the sum of the front-stage cost, the middle-stage cost and the final-stage cost is taken as the total life cycle cost of the distribution network power equipment. According to the method, a power grid enterprise can effectively manage and control the cost of the distribution network power equipment and make an optimal investment strategy.