Accrued depreciation refers to the total amount of depreciation that has been recorded for an asset up to a specific point in time, reflecting the reduction in value due to wear and tear, obsolescence, or other factors.
The balance-sheet value of an asset or liability, representing the amount at which it is reported on the financial statements.
Constant dollar is an accounting term used to reflect the value of money after adjusting for inflation, providing a consistent measurement standard across different time periods.
The expenditure on goods and services required to carry out the operations of an organization. Different methods of defining cost are used in accounting to reflect various aspects of financial reporting and decision making.
The cost convention refers to the basis used for recording costs charged against profit during an accounting period, which can be based on historical cost, current cost, or replacement cost.
The traditional method of measuring fixed assets where they are valued at their historical cost less accumulated depreciation, with an alternative being the revaluation model.
A method of valuing units of stock or other assets based on the original cost incurred by the organization, charging the original cost against profits through various means such as FIFO or average cost, and reporting depreciation based on the original cost.
The accounting principle under which assets are recorded and carried in the books of account at their original purchase cost.
A memorandum item in the annual accounts and report of a company giving an abbreviated restatement of the profit and loss account showing the reported profit or loss as if no revaluations had been made.
The Lower of Cost or Market (LCM) accounting method involves recording inventory at its historical cost but writing it down to market value if that is lower. Market value is defined as replacement cost, capped by net realizable value (NRV) and cannot be less than NRV minus a normal profit margin.
The original cost refers to the initial amount paid to acquire an asset, which is used as the basis for financial reporting and depreciation calculations.
The pooling-of-interests method was an accounting approach previously used in business combinations in the USA, reflecting the continuation of the acquired company's accounts at book value.
Revaluation of Fixed Assets refers to the process of re-assessing the value of a company's capital assets, either because they have increased in value or due to inflation rendering balance-sheet values unrealistic. This accounting practice is crucial for presenting accurate financial statements.
The unamortized cost is the historical cost of a fixed asset minus the total depreciation or amortization applied to it up to a specified date. It represents the current book value of the asset in financial accounting.
