SALE ENDS AT MIDNIGHT: Get started with $1000 off!

Cost Principle

Cost Principle

Using the original purchase price to value assets.

If you buy a piece of land in 1950 for $10,000 and it is currently worth $400,000 GAAP requires that you list the value of the land as $10,000 for balance sheet purposes. The land is listed at its original cost. This is not the case for IFRS, international accounting.

There is currently no content classified with this term.

Get instant access to step-by-step instructions on how to apply and sit for the CPA Exam.