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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 accounting
Inaccurate forecasting
Aggravates:
Insurance industry collapse
Lack of funding for infrastructure
Undervaluation of community wealth
Deteriorating physical infrastructure in cities
Disparity between share prices and underlying asset values
Strategies:
Establishing cost accounting
Valuing asset replacement costs
Undervaluing asset replacement costs
Subject(s):
Commerce
→
Finance
Commerce
→
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