Читать книгу QuickBooks 2022 All-in-One For Dummies - Nelson Stephen L., Stephen L. Nelson - Страница 29

The cost principle states that amounts in your accounting system should be quantified, or measured, by using historical cost. If you have a business, and the business owns a building, that building — according to the cost principle — shows up on your balance sheet at its historical cost. You don’t adjust the values in an accounting system for changes in a fair market value. You use the original historical costs.

I should admit that the cost principle is occasionally violated in a couple of ways. The cost principle is adjusted through the application of depreciation, which I discuss in Book 1, Chapter 3. Also, fair market values are sometimes used to value assets, but only when assets are worth less than they cost.