--%>
Assignment Help - homework help

Advantage of Historical Cost in Decision Making

What is the advantage of Historical Cost in Decision Making?

E

Expert

Verified

Advantage of Historical Cost in Decision Making:

As investor, whenever you have to evaluate the balance sheet for taking investment decision, you have to ensure every historical cost and try to transform it in fair value. With this, you can find actual lose of any asset whenever we compare historical cost with the current value. You can as well recreate the balance sheet on the basis changes in price level when you get balance sheet on the basis of historical cost. On another side, when you are employing historical cost technique for making balance sheet, you require not to record the gain before selling the asset since you have exposed all assets in the book on historical cost basis.

   Related Questions in Financial Accounting

  • Q : Define the term Accounts Payable

    Accounts Payable: It is an accounting entry which symbolizes an entity's obligation to pay off a short-term debt to its creditors. Accounts payable entry is found on balance sheet beneath the heading current liabilities. Accounts payable are frequentl

    		•
  • Q : Swap broker and swap dealer State the

    State the difference between the swap broker and the swap dealer.

    		•
  • Q : Cash flows from operating activities A

    A financial analysis tools that measures the need for financing. The formula is the cash-flow from operating activities divided by the cash paid for long-term asset. Cash paid for long-term assets can be found on the statement of cash-flow, in the investing-activities

    		•
  • Q : Workings and nature of the financial

    Assume that you are really interested in investing in the shares of Nokia Corporation of Finland that is a world leader in the wireless communication. However, before making the investment decision, you might like to learn about company. Take a look of the website of

    		•
  • Q : Vernon’s product life-cycle theory of

    Discuss the Vernon’s product life-cycle theory of the FDI. Specify the strength and weakness of theory?

    		•
  • Q : Describe JOC in accounting Describe JOC

    Describe JOC in accounting?

    		•
  • Q : Article on Valuation of assets Write an

    Write an article on Valuation of assets serves for both buyers and sellers of goods and services.

    		•
  • Q : Abnormal profits Atypically large

      Atypically large proceeds made by an individual or company from commercial activity. An abnormal profit exceeds the normal chance for profit derived from labor costs and capital and considered normal profit. Abnormal profit in a business resides of monopoly and consortium profits.

    		•
  • Q : Explain the term Fixed Assets Explain

    Explain the term Fixed Assets and what are their advantages in production or business aims?

    		•
  • Q : Call Option-Out of the money Explain

    Explain the terminology that an option is in-, at-, or out-of-the-money?

    		•