historical cost

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Historical cost

Describes the accounting cost carried in the books and reflecting the cost of the item at the time it was purchased, rather than its current value.

Historical Cost

In the Generally Accepted Accounting Principles, the original cost of an asset on a balance sheet. Many assets, particularly illiquid assets, are recorded on a balance sheet according to their historical cost. A notable exception to this rule is the recording of marketable securities, which are recorded according to their market value. The historical cost usually bears little or no relationship to the market value after an asset has been held for several years.

historical cost

The amount of money that was originally used to pay for an asset. A company records assets on a balance sheet at historical cost, which often bears little relation to the market value of the assets after they have been owned several years. Also called original cost.
References in periodicals archive ?
This is in direct opposition to the American historical cost concept, accounting for transactions at the market prices at which they occurred.
The proposed guide relies on the historical cost concept: an asset is recognized at cost to the acquirer, and if no cost exists (as in the case of a non-reciprocal transfer of an asset by the developer to the CIRA), then the fair value of the asset received is used for the cost basis.
The guide relies solely on the definition of an asset and the historical cost concept. We believe, however, that the debate over the definition of an asset is misdirected since the perspective of individual owners and the uniqueness of the reporting entity (CIRA) is not properly evaluated.

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