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 ?
Friday's constructive order from the North Carolina Utilities Commission in the Duke Energy Progress rate case effectively allows recovery of a majority of the utility's historical costs related to coal ash basin closures, Arnold tells investors in a research note.
The proposed draft law contains revised sections and articles regarding transparency of subsoil deals, order and terms of restrictions for subsoil use, regulation of compensation of historical costs incurred by the state for geological exploration of the licensed area and exploration of deposits, said MP Urmat Amanbaeva (Respublika) at the plenary session of the Parliament on Friday.
Although there has been a move toward fair value accounting for all assets and liabilities, standards setters like the FASB and IASB and regulators like the SEC should consider the value of using historical costs as inputs in certain circumstances.
The historical costs of the picture can be obtained directly from the client or studio if it is a matter in which historical data can be relied upon.
Specifically, if the FASB continues its current depreciation recommendations for long-lived assets, with historical costs serving as the basis for the calculation, it is simply reinforcing its longstanding policy.
Advocates of fair value accounting believe that fair values provide more relevant measures of assets, liabilities, and earnings than do historical costs.
However, the statement preparation was influenced by senior management's longtime use of historical costs and its doubts about the relevance of market values and was constrained by the difficulty of obtaining market value data for special or unmarketable assets.
Summary estimates and analyses of the position, valued in current-period prices as well as historical costs, were published in the June 1992 Survey article "The International Investment Position of the United States in 1991.
Based on the probability that real estate values will continue to fluctuate in most areas, but stabilize well above cost for most companies with low-cost real estate, financial statements based on historical costs will continue to decline in usefulness.
2 million for the budget from payment of historical costs by a subsoil user, said Urmat Amanbaeva (Respublika) at the plenary session of the Parliament on Friday.

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