historical costn.
/hɪˌstɒrᵻkl ˈkɒst/, U.S. /hɪˌstɔrək(ə)l ˈkɔst/, /hɪˌstɔrək(ə)l ˈkɑst/ Economics and Accounting.
The value of a unit of stock or other asset based on the original cost incurred when first bought or produced.
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1894 Ann. Amer. Acad. Polit. & Social Sci. 5 55 The price of copper goods may be determined..by other conditions than historically reckoned cost... Even though in the long run the elementary ‘historical’ cost plays an important part.
1911 Trans. Amer. Soc. of Civil Engineers 267 Correct present value estimates which include depreciation may not be even fairly approximated without intimate knowledge of the particular property, and this should embody operation, policy of management, past performance, study of historical cost,..estimated cost of construction, and actual cost of maintenance.
1965 E. Mansfield in Transportation Econ. (National Bureau of Econ. Res.) ii. 203 If the prices of equipment are unchanged and the life of the equipment is estimated correctly, then depreciation practices based on original or historical cost achieve this objective.
2002 Making Prop. Work (Land Securities plc) Mar. 57/2 Freehold land is carried at historical cost and is not depreciated.
Compounds
C1. General attributive.
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1916 Utilities Mag. 16 Jan. 75/2 We find courts constantly admitting evidence appropriate to valuation upon historical cost basis or actual cost basis or reproductive cost basis.
1937 Amer. Econ. Rev. 27 476 In the long run it is the market or replacement or prospective cost that is significant, and historical cost systems are not.
1968 Jrnl. Transport Econ. & Policy 2 207 Even a depreciated historical cost valuation only eliminates part of the objection to the historical cost method.
1976 Chem. Week (Nexis) 14 Jan. 26 The major effect of this part of the ruling for chemical firms is that inventories carried at cost become translated on a historical cost basis.
2006 K. Camfferman & S. A. Zeff Financial Reporting & Global Capital Markets ii. v. 132 The exposure draft..intended the standard to be applied both in historical cost and in current cost financial statements, but the final standard was limited to historical cost systems only.
C2.
historical cost accounting n. a system of accounting in which assets are valued at their historical cost; cf. current cost accounting n. at current adj. Compounds.
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1929 Paper Trade Jrnl. 89 55/1 Historical cost accounting..can seldom furnish the executive with anything but rough data.
2004 B. McLean & P. Elkind Smartest Guys in Room (rev. ed.) iii. 40 Skilling also insisted that mark-to-market accounting gave a truer reading of a company's financial reality than the more common historical-cost accounting.
historical cost convention n. an accounting convention under which assets are recorded at their historical cost and are not subsequently revalued.
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1937 W. E. Atkins & J. D. Magee Probl. Approach to Econ. vi. 139 Underlying the historical cost convention of valuation is the assumption that the price paid by the enterprise for the acquisition of a particular asset is a fair or market price.
2000 Thames Water Ann. Rep. & Accts. 31 The financial statements have been prepared in accordance with the historical cost convention.
This is a new entry (OED Third Edition, March 2012; most recently modified version published online March 2022).
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n.1894