The historical cost principle requires that companies record assets at their

Question

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The historical cost principle states that assets should be recorded at their cost, which is the amount paid or the fair value of the consideration given to acquire the asset. This provides objective and verifiable information and enables comparability between different companies that may have acquired the same or similar assets. Appraisal value, market price, and list price are not relevant for determining the initial cost of an asset according to the historical cost principle.

The Historical Cost Principle Requires That Companies Record Assets at Their