What is a practical example of historical costs as a limitation for financial statements

Law

1 answer:

Vika [28.1K]1 year ago

6 0

A practical example of historical costs as a limitation for financial statements are:

fails to disclose the current worth of the enterprise
incomparable items in Financial Statements
its difficult to replace Fixed Assets
leads to inaccurate determination of profit etc.

<h3>What are significance of historical costs?</h3>

Basically, a historical cost refers to the measure of value used in accounting in which the value of an asset on the balance sheet is recorded at its original cost when acquired by the company. This costing method is used for fixed assets in the United States under generally accepted accounting principles (GAAP)

In United States, the principle of historical cost is a basic accounting principle under U.S. GAAP where most assets are to be recorded on the balance sheet at their historical cost even if they have significantly increased in value over time. However, not every assets are held at historical cost. For instance, a marketable securities are recorded at their fair market value on the balance sheet and impaired intangible assets are written down from historical cost to their fair market value.

You might be interested in

Aside from CERT Basic Training, your sponsoring organization may offer additional training on emergency flood response and which

kherson [118]

Answer:

Emergency communications

Explanation:

The CERT programs offers foundational training to volunteers on several emergency situations and how to handle them individually and collectively and also on how to help prevent the emergencies from escalating. therefore aside from emergency flood response another subject matter that the sponsoring organization should train the Volunteers on Emergency communications.

6 0

3 years ago

Which one is not a type of danger with law enforcement?

asambeis [7]

I think the answer would be E none of the above because all of them are types of dangers law enforcement may have to encounter

5 0

3 years ago

When is it okay for information to be provided by a therapist?

Dafna1 [17]

When they see your struggling

6 0

3 years ago

Read 2 more answers

PLEASE ANSWER QUICKLY

Step2247 [10]

B animal rights group is pushing its views on the legislator

6 0

3 years ago

What’s the importance of Steagald v United States? And do you agree with the decision?

nlexa [21]

Answer:

The decision of the Supreme Court on Steagald v United States (1981) established that according to the Fourth Amendment, police officers can´t search for a suspect in a third party´s property without getting a search warrant first.

Explanation:

According to the Supreme Court, the search carried in the house of the petitioner, Gary Keith Steagald, which was conducted only with an arrest warrant for Ricky Lyons, and led to Steagald´s arrest, was a violation of the exclusionary rule stated in the Fourth Amendment that protects all citizens from illegal searches and seizures. I do agree with this decision because any effort to apprehend a suspect should never infringe nor his or a third party´s constitutional rights.

7 0

2 years ago