1. Historical Cost Accounting
Historical cost measures assets at the value exchanged to acquire them, net of accumulated depreciation or amortization.
  • Pros: Highly verifiable, objective, and free from subjective management estimates.
  • Cons: Fails to reflect changing market realities, inflation, or the current appreciation of long-held assets.

2. Current Value Accounting Frameworks
Modern global reporting uses a mixed-measurement model that includes various current value attributes:
┌────────────────────────────────────────────────────────────────────────┐
│                      Current Value Measurements                        │
├───────────────────────────┬───────────────────────────┬────────────────┤
│ Fair Value                │ Value in Use              │ Current Cost   │
├───────────────────────────┼───────────────────────────┼────────────────┤
│ Market-based exit price   │ Entity-specific present   │ Present cost   │
│ (IFRS 13 / ASC 820)       │ value of future cash flows│ to replace asset│
└───────────────────────────┴───────────────────────────┴────────────────┘

  • Fair Value: An exit price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (IFRS 13 / ASC 820).
  • Value in Use / Fulfillment Value: An entity-specific measurement reflecting the present value of the cash flows an entity expects to derive from the continuing use of an asset and its ultimate disposal.
  • Current Cost: The cash or cash equivalent needed to acquire an equivalent asset at the measurement date.
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