Historical cost accounting and Price: Difference between pages

Revision as of 14:36, 11 May 2016

An amount of money given or proposed in relation to a transaction, for example a financial transaction.

Usually, but not necessarily, quoted on the conventional basis for the market in question.

Market prices include foreign exchange rates.

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-''Financial reporting - measurement.''
+An amount of money given or proposed in relation to a transaction, for example a financial transaction.
-Historical cost accounting is the usual traditional basis of measurement in published financial statements, based on the orginal cost of assets to the reporting entity.
+Usually, but not necessarily, quoted on the conventional basis for the market in question.
-It was generally favoured because historical cost is an objective measure which can be relatively easily verified, for example by an auditor.
-The use of historical cost accounting can  however be challenged on conceptual grounds, especially in times of high inflation or volatility in current market values.
+Market prices include foreign exchange rates.
-For this reason, fair value accounting supplements and replaces historical cost accounting for a number of items.  Fair value measurement is based much more closely on current market values.
 == See also ==
-* [[Amortised cost]]
-* [[Current cost accounting]]
-* [[Fair value]]
-* [[Financial reporting]]
-* [[Historical cost]]
-* [[Measurement]]
-* [[Short termism]]
-[[Category:Accounting,_tax_and_regulation]]
+*[[Bid-offer price]]
+*[[Market price]]
+*[[Market value]]
+*[[Rate]]
+*[[Value]]
+*[[Yield]]