Historical Cost Convention – Definition November 13, 2019 by Abbas Ahmad What is the Historical Cost Convention? Under the Historical Cost Convention, assets and liabilities are initially recorded in the accounting system at their original or historical cost and are not adjusted for the subsequent increase in value. Related posts: Matching Convention Definition 8 Things You Need to Remember When Creating a Winning Custom Office Envelope Design Current Cost of Sales Adjustment (COSA) Limitations of Historical Cost Accounting Q. 4. What is the difference between standard costing and historical costing?