In desalination, similarly with other industries, the cost of the final product is one of the most important criteria that define the commercial success of a specific technology. Therefore, when new projects are planned or new technologies are proposed, the analysis of the expected costs attracts a lot of attention and is compared to (perceived) costs of state-of-the-art desalination or costs of alternative fresh water supply options. This comparison only makes sense if the cost assessment methodologies are based on the same principles and use common assumptions. This paper assesses: (i) the methodologies used to calculate the water cost; (ii) the boundary conditions and (iii) the input data and assumptions. It has been found that most papers in the literature use suitable equations and boundary conditions. Also certain elements like land costs are ignored, but in most cases this is duly acknowledged and justified. However, the quality of the input data for the hardware costs, the operating costs, and the financial parameters are not always appropriate. Guidance for the methodology, data and assumptions that should be used is provided depending on the purpose for which the cost of the desalinated water is calculated.