Historical Cost Convention – Definition

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.

Homogeneous cost

Homogeneous cost pool is a cost pool in which each activity whose costs are included in it as the same or a similar cause and effect relationship between the cost driver and the costs at that activity.

High-low method

High-low method is a method of estimating a cost function that uses only the highest and values of the cost driver within the relevant range.