Historical Cost Principle
PAS and GAAP recognized that elements of Assets and Liabilities are measured based on their original transaction value. And, this is their historical cost.
For asset, this is the exchange or transaction value given for the asset at the point of acquisition.
For liabilities, it is the current cash equivalent received at the time when assuming the liability.
In other words, historical cost principle states that the measurement of asset or liability must be based on the amount given or received in the exchange transaction.
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