Definition of Historical Cost Principle in Accounting: Stability in Financial Reporting l Learn 5 Important Differences Between Historical Cost Accounting and Fair Value Accounting: A Deep Dive

The Historical Cost is one of the most important concepts in accounting. In very simple words, “the monetary value what is paid to acquire the ownership of assets or what the business agreed to pay on the later date”. In other words, the monetary value of acquisition or original purchase price of an asset is called the “Historical Cost“.

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