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  Dictionary  »  Letter H  »  historical cost

historical cost

The original cost incurred to acquire an asset (as opposed to replacement cost, current cost, or cost adjusted by a general price index). If a company purchased land in 1940 for $1,000 and continues to hold that land, the company's balance sheet in the year 2010 will report the land at $1,000 (even if the land is now worth $400,000).


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