Abstract
Historical cost is the cost at which an asset was actually purchased. This is the value traditionally imputed to assets in accounts. Valuation at historical cost was a natural process in the early days of accrual accounting. Historical cost represented money which had been paid out (or a liability created) which was not to be charged against profit because it represented the creation of an asset, rather than an expense. Thus, the logic of double entry suggested that assets should, initially at least, be valued at historical cost.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Ijiri, Y. 1971. A defence for historical cost accounting. In Asset valuation and income determination, a consideration of the alternatives, ed. R.R. Sterling. Houston: Scholars Book Co., 1975.
Sandilands Report. 1975. Inflation accounting: Report of the inflation accounting committee under the chairmanship of F.E.P. Sandilands, Cmnd. 6225, London: HMSO, September 1975.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Whittington, G. (2018). Historical Cost Accounting. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1064
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_1064
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences