Historical Cost Concept in Accounting
The amount will be recorded in the accounting book despite the volatility of the market price of the item. Accountant is of the view that entity must take inflation in to account and appreciate the assets value. Microeconomics Cost Functions Its been around for ages. . See how ease of access consistency and. Historical Cost Accounting is the concept which asset on balance sheet should record depend on price at the time of purchase. This might not present an actual value from the perspective of the company. In accounting the historical cost of an asset refers to its purchase price or its original monetary value. Based on the historical cost principle the transactions of a business tend to be recorded at their historical costs. The historical cost concept is grounded on the going concern assumption of accounting. Consequently the amounts reported for these balance sheet items often. The current market value
