Problem
Undervaluation of asset replacement costs
Other Names:
Inappropriate historical cost accounting Incidence:
Historical cost accounting continues to have almost universal support and application. Within the past decade, however, a wide disparity between historical costs and current replacement costs of plant, equipment and inventories has developed. Broader Problems:
Imperfect accountingInaccurate forecasting Aggravates:
Insurance industry collapseLack of funding for infrastructureUndervaluation of community wealthDeteriorating physical infrastructure in citiesDisparity between share prices and underlying asset values Strategies:
Establishing cost accountingValuing asset replacement costsUndervaluing asset replacement costs Subject(s):
Commerce → FinanceCommerce → Accounting
Commerce → Purchasing, supplying
History → History
Related UN Sustainable Development Goals:
Problem Type:
F: Fuzzy exceptional problems Date of last update
04.10.2020 – 22:48 CEST