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.
Historical Cost Accounting is a system of accounting based primarily on the original costs incurred in a transaction. Often employed to enhance objectivity, ease of application, and audit verification.
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.
An acquisition that is bought, as contrasted with an exchange, gift, or inheritance. Generally, the purchase price serves as the original cost basis.
Replacement Cost Accounting is an accounting method allowing for additional depreciation on a part of the difference between the original cost and the current replacement cost of a depreciable asset.
The unrecovered cost represents the unexpired book value of an asset, typically calculated as the original cost less accumulated depreciation.
