portions of these costs which have been consumed are reported as expenses on the income statement, while the unconsumed portions are reported as assets on the balance sheet.
The use of historical costs in financial accounting is justified on the bases of (1) objectivity, and (2) consistency with the going concern postulate. Historical costs are objective, in that they are accurate, verifiable measurements. __________
5G. M. von Furstenberg, "Corporate Taxes and Financing Under Continuing Inflation," Contemporary Economic Problems 1976 (Washington: American Economic Institute, 1976), 225254.
6V. Govindarajan, "Use of Accounting Data in Product Pricing," Corporate Accounting, 2 (1984): 3844.
7W. C. Norby, "Application of InflationAdjusted Accounting Data," Financial Analysts Journal, 39 (1983): 33.
The going concern postulate assumes operating continuity. In this context, financial statements provide a tentative report on a firm
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