The historical cost principle would be of limited usefulness if not for the going concern assumption.

Question

Quizplus · Accepted Answer

The historical cost principle records assets at their original cost at the time of acquisition. However, this becomes irrelevant if the assumption of going concern is not present. The going concern assumption assumes that the company will continue to operate indefinitely, enabling the organization to use historical cost as a fair and reliable basis for asset valuation since it assumes the company will not liquidate soon.

The Historical Cost Principle Would Be of Limited Usefulness If