In general, standard setters require that most assets be recorded using historical cost because
A) current values may overstate assets and equity.
B) current values may not always be representationally faithful.
C) cost often cannot be verified.
D) cost values may or may not be relevant.

Question

Quizplus · Accepted Answer

Historical cost is used because it is objective and verifiable, whereas current values may not always accurately represent the true value of an asset, leading to potential issues with representational faithfulness.

In General, Standard Setters Require That Most Assets Be Recorded