historical cost accounting การใช้

• Instead, the company used historical cost accounting, which is legal.
• From this year on, CSM will change to historical cost accounting from a replacement cost basis.
• Most principles of historical cost accounting were developed after the Wall Street Crash of 1929, including the presumption of a stable currency.
• This is confirmed by PricewaterhouseCoopers : " Inflation-adjusted financial statements are an extension to, not a departure from, historical cost accounting ."
• In contrast, historical cost accounting, based on the past transactions, is simpler, more stable, and easier to perform, but does not represent current market value.
• The Capital Maintenance in Units of Constant Purchasing Power model is an International Accounting Standards Board approved alternative basic accounting model to the traditional Historical Cost Accounting model.
• However, money is generally never perfectly stable in real value which is the fundamental problem with traditional Historical Cost Accounting which is based on the stable measuring unit assumption.
• Some opponents may even suggest that historical cost accounting is more accurate by arguing that financial institutions are forced to record any permanent impairment in the market value of their assets.
• One of the basic principles in historical cost accounting is " The Measuring Unit principle " ( or stable measuring unit assumption ) : The unit of measure in accounting shall be the base money unit of the most relevant currency.
• Fair value accounting ( also called replacement cost accounting or current cost accounting ) was widely used in the 19th and early 20th centuries, but historical cost accounting became more widespread after values overstated during the 1920s were reversed during the Great Depression of the 1930s.
• All monetary units of measure, e . g ., US dollar, euro, yen, yuan, ruble, peso, etc . ( all fiat currency units ) are assumed to be perfectly stable in real value during non-hyperinflationary conditions under traditional Historical Cost Accounting in terms of which the stable measuring unit assumption is applied.
• Extract from peer reviewed article ( fact ) : " The combination of the Historical Cost Accounting model and low inflation is thus indirectly responsible for the destruction of the real value of Retained Income equal to the annual average value of Retained Income times the average annual rate of inflation ."
• The IASB's Framework introduced Capital Maintenance in Units of Constant Purchasing Power as an alternative to Historical Cost Accounting in 1989 in Par . 104 ( a ) where it states that financial capital maintenance can be measured in either nominal monetary units-the traditional HCA model-or in units of constant purchasing power at all levels of inflation and deflation : the CMUCPP model.
• "' Constant purchasing power accounting "'is an accounting model approved by the International Accounting Standards Board ( IASB ) as an alternative to traditional historical cost accounting under hyper-inflationary environments . ) Under this system, financial capital maintenance is measured in units of constant purchasing power ( CPP ) in terms of a Daily CPI ( consumer price index ) during low inflation and deflation.