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 ?
In its explanation, the FBR further said that for the purpose of declaring a foreign hidden asset the cost of acquisition is the historical cost. But that historical cost will be worked out at today's exchange rate, which has increased the effective tax rate far higher than the announced 5% rate.
Furthermore, the tax regulator described for the purpose of declaring a hidden overseas asset, the cost of acquisition was the historical cost.
Thus, assessment of transactions and events is carried out at the present time and is based, at input, on historical cost and at output on the selling price.
Unless otherwise indicated, this report uses direct investment valued as historical cost.
The proposed Financial Reporting Framework for SMEs (FRF-SME) was expected to be released for public comment in October and is designed to emphasize familiar ac counting concepts such as historical cost and the matching of revenues with costs.
With a combination of unique products and some of the top consultants in the industry, Eos Group assists companies with the implementation of enterprise systems that couple historical cost data with a standardized approach to produce accurate, defensible estimates.
INTRODUCTION: HISTORICAL COST VERSUS MARK-TO-MARKET ACCOUNTING
The deal is valued at USD2.5m with USD825,000 in cash and USD1,675,000 of historical cost liabilities.
Lately, under the pressure of investors and with help from the organizations involved in regulating accounting activities, we have witnessed a change of the traditional accounting model based on historical cost, which has turned into an accounting model based on the fair value, which would in turn meet the requirements for maximizing share value" (Ionascu, 2003).
The Pentagon's outdated systems do not maintain needed historical cost data, the report said.
Prior to the issuance of Statement 52, state and local government endowments were i required to report land and other real estate held as investments at historical cost, which provides information on investment results only in the year the investments are sold.

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