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Title: Cost

Essay Details:

Subject: Business

Author:

Date: March 26, 2012

Level: University

Grade: A

Length: 4 / 1166

Essay text:

Historical cost means what it cost the company for the item. It is not fair market value. This means that if a company purchased a building, it is recorded on the balance sheet at its historical cost. It is not recorded at fair market value, which would be what the company could sell the building for in the open market. Criticisms of the historical costs method Historical cost method, over a period of time has been subject to many criticisms, especially as it considers the acquisition cost of an asset and does not recognise the current market value. Historical costs is only interested in cost allocations and not in the value of an asset...

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