Advantages of Using Historical Cost as the Basis of Valuation

question 4

Multiple Choice

Advantages of using historical cost as the basis of valuation of property, plant, and equipment include all of the following except

• A) it is representationally faithful.
• B) gains and losses from holding the asset are recognized in the period of value change.
• C) cost equals the fair market value at the date of acquisition.
• D) it is consistent with the valuation of many other assets and liabilities.

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Definitions:

Refreezing

Refreezing refers to the final stage of Lewin's change model where new behaviors or changes are solidified into everyday practices.

Lewin's Change Model

A framework for understanding organizational change involving three steps: unfreezing, change, and refreezing.

New Norms

The emergence of updated or redefined standards of behavior and beliefs within a society or group.

Lewin's Change Model

A framework for understanding change process through the stages of unfreezing, changing, and refreezing.