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Dictionary by pitch.dog
Accounting policy, GAAP & adjustments · Core

Historical cost

Also called: cost basis

ELI5

Measurement based primarily on the transaction price when an asset or liability arose.

Used in conversation

“Can we state who receives the right created by historical cost, and when it applies?”

Pitch context

You will see “Historical cost” in financial models, budgets, board packs and investor materials when the discussion reaches accounting policy, gaap & adjustments.

Why it matters: In accounting policy, gaap & adjustments, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

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Sources & evidence · 4

Direct term-level sources and supporting source families.