Which of the following qualities are impaired under historical costing?

Question

Quizplus · Accepted Answer

Historical costing impairs additivity, predictive value and representational faithfulness. Additivity is impaired as the historical cost of an asset is not adjusted for changes in price level. Predictive value is impaired as the historical cost does not provide reliable information about the market value of an asset. Representational faithfulness is impaired as the historical cost does not reflect the true economic value of an asset.

Which of the Following Qualities Are Impaired Under Historical Costing