historic cost

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.

historic cost

the original cost of purchasing an ASSET (such as an item of machinery). For accountancy purposes, the asset is entered in a firm's BALANCE SHEET at historic cost. However, allowance has to be made for the REPLACEMENT COST of the asset which, because of INFLATION, may well be considerably greater than the original price paid. Thus, DEPRECIATION provisions which are generally based on the historic cost of assets may be inadequate in a period of rapidly rising prices. See INFLATION ACCOUNTING, MARKET VALUE.

historic cost

the original cost of purchasing an ASSET (such as an item of machinery). For accountancy purposes, the asset is entered in a firm's BALANCE SHEET at historic cost. However, allowance has to be made for the REPLACEMENT COST of the asset, which, because of INFLATION, may well be considerably greater than the original price paid. Thus, DEPRECIATION provisions may be inadequate in a period of rapidly rising prices. See INFLATION ACCOUNTING.

historic cost

The cost of a structure when it was first built.Contrast with original cost,which is the price paid by the current owner.

References in periodicals archive ?
The value of this dividend, representing the historic cost of investment of Barclays PLC in BAGHL and its subsidiaries, was 269m [pounds sterling]
But Boston's total real estate assets are actually worth almost 40 times their book value, because they are reported at their historic cost. In other words, the city has massive amounts of hidden wealth.
Book value, or equity, is the historic cost basis of the business, which is derived by looking at the balance sheet assets minus liabilities.
The 15 percent equity contribution safe harbor provision is easier to meet, as now the borrower receives credit for the current appraised value of contributed property (rather than historic cost).
Whittington (1994) points out that the SSAP 16 required that all listed and large companies use not only historic cost, but accounting criteria at current cost, through deprival value, in the preparation of their financial statements.
Of course, what is totally unacceptable is what we have seen happening in practice, namely the reporting of some assets at their historic cost and other assets at their market value.
In this author's opinion, a donor-restricted endowment fund should be measured at the original dollar value established by the donor, minus allowable expenditures and prudent appropriations, reflecting current law (adjusted historic cost).
The report outlines Kazakhstan's governing bodies, laws, mining licenses, rights, obligations and tax-related information which includes signing bonus, commercial discovery bonus, payment to compensate for historic cost, tax on production of useful minerals, excess profits tax, corporate income tax, capital gains tax, land tax, social (payroll) tax, vehicle tax, deductions, depreciation, loss carry forward, withholding taxes, value added tax(Vat).
At the same time, AEB's ratings are supported by a track record of good asset quality, with historic cost of risk not exceeding 2%.
But the biggest hit came from a Aus$2.6 billion non-cash write-down of the value of its ageing international fleet, largely due to the historic cost of aircraft purchased at a much lower Australian dollar exchange rate.
A total of 69 firms were contacted and the results indicated that 43% had a real or historic cost system, 37% had estimated or standard ones and only 6% were activity-based costs; 14% did not reply.
historic cost, and relevance versus reliability, is nothing new; it was at the center of early accounting discussions in the AAA (especially by A.C.

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