What is the most useful method of valuing capital assets when trying to meet the stewardship objective of accounting?

Question

Quizplus · Accepted Answer

Historical cost is the most useful method of valuing capital assets when trying to meet the stewardship objective of accounting. This is because it provides a reliable record of the original cost of the asset as well as any subsequent expenditures that have been made to maintain or improve the asset. Historical cost provides a verifiable and auditable record of the acquisition and maintenance costs of the asset, which is important for financial reporting purposes. The other methods of valuation such as net realizable value, replacement cost, and market value are useful in specific contexts but do not provide the same level of accuracy and verifiability as historical cost for meeting the stewardship objective.

What Is the Most Useful Method of Valuing Capital Assets