Thursday, March 27, 2008


Historical Cost:
Historical cost is a generally accepted accounting principle requiring all financial statement items be based upon original cost. Historical cost means what it cost the company for the item. It is not fair market value. This means that if your 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 your company could sell the building for in the open market.

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