Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 2 - Conceptual Framework for Financial Reporting - Review and Practice - Questions - Page 62: 15


its important to note that; accounting data should be highly based on historical cost due to the following arguments: i. Usually, cost is verifiable as well definite compared to other values which need to be somewhat determined arbitrarily and as a result they would be considerable disagreement as to the amounts to be used. ii. Amounts determined by other bases would have to be revised and adjusted frequently. iii. Usually, comparison with other companies is highly aided if cost is employed.

Work Step by Step

Additionally, the costs of obtaining replacement values could outweigh the benefits derived.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.