Question

The historical cost principle requires that when assets are acquired, they be recorded ata. appraisal value.b. cost.c. market price.d. book value.

Answer 1

Answer:

b. cost

Explanation:

Assets are accounted for under IAS 16 Property plant and Equipment, IAS 38 Intangible assets and IAS 40 and 41 Investment property and Biological assets.

The historical cost principle requires that assets on initial recognition be recorded at cost. This cost is maintained even as depreciation is charged for the use of the asset.

The cost is then netted off the accumulated depreciation to get the net book value of the asset or the carrying amount.

Answer 2

Answer:

The historical cost principle requires that when assets are acquired, they be recorded at b. cost

Explanation:

Historic Cost Principle is Accepted under US GAAP and requires that assets be shown in the balance sheet at their original cost of purchase instead of their current value.

Cost of Purchase include all costs incurred to purchase the asset and any direct expense towards putting asset in the location and condition intended for use by the owner.