Explain the main limitations of historic cost accounting

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Question:

'Commentators on financial reporting practices argue that financial statements produced under the historic cost convention do not provide relevant information to users of those statements in times of rising prices.'

Identify and explain the main limitations of historic cost accounting and discuss how the use of other capital maintenance concepts to that applied under historical cost accounting might provide more useful information to users of financial statements.

 

Reference no: EM13340349

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