When historical cost measurement is adopted, assets are measured according to the amount of cash or cash equivalents paid at the time of acquisition, or according to the fair value of the consideration paid at the time of acquisition. Liabilities are measured according to the amount of money or assets actually received due to current obligations, or the contract amount of current obligations, or the amount of cash or cash equivalents expected to be paid in daily activities to repay debts. For example, I bought a device worth 654.38+ 10,000 yuan today, so whenever someone asks me how much this device costs, I will answer: 654.38+ 10,000 yuan. Even if the price of the same equipment on the market is reduced to 1 10,000 or increased to 1 10,000, mine is also 1 10,000. This is the historical cost.
I think historical cost is the real price paid when buying assets. No matter how the market price of similar products changes in the future, if it is to be measured according to the measurement attribute of historical cost, its cost will always be the price we paid when we bought back. Simply put, the measurement attribute of historical cost is "purchase price". Then we infer that it is most appropriate to use historical cost to account for assets in practice. The replacement cost, also known as the current cost, refers to the amount of cash or cash equivalent that needs to be paid to regain the same asset according to the current market conditions.
When the replacement cost method is adopted, assets are measured according to the amount of cash or cash equivalents that need to be paid for the same or similar assets now, and liabilities are measured according to the amount of cash or cash equivalents that need to be paid for liabilities now. For example, the company took stock and found that a brand-new equipment was surplus, but there was no evidence to prove its value at the time of purchase, so it was impossible to find out the reason for the surplus. I found in the market that the brand-new equipment of the same model needs 50 thousand yuan, so I can calculate the replacement cost of this equipment at the price of 50 thousand yuan. Did you find that in the example, I emphasized that "there is no evidence to prove its value at the time of purchase, and it is impossible to find out the remaining reasons". I want to emphasize this point because I think the key to replacement cost should be the word "replacement". The reason for the replacement is that the most accurate "historical cost" cannot be obtained, so the current uncertain cost must be replaced by the current market price as the cost.
Simply put, the replacement cost is the "market price". Then we can also infer that in practice, if there is a surplus or deficit in assets, when the accurate "historical cost" cannot be determined, the replacement cost can be selected as the basis for entry. Net realizable value refers to the net realizable value in the process of production and operation, that is, the estimated selling price MINUS the estimated taxes and fees and the expenses necessary for further processing and sales. If the net realizable value is used for measurement, it shall be measured according to the amount of cash or cash equivalent that can be received in normal external sales, after deducting the estimated cost, estimated sales expenses and related taxes and fees that will occur when the assets are completed. For example, I have 100 TV sets, with a book value of1000000 yuan. However, due to the economic downturn, the current market price of these TVs may only be 900,000 yuan, and I may have to bear the related taxes of 50,000 yuan (excluding VAT) and the sales expenses of 1 10,000 yuan. In fact, the net realizable value of these TVs is 90-5-. I think the net realizable value is actually easier to understand, but do you have any questions? Same as replacement cost. Since it is based on the current market price, why should we create a new measurement attribute? The key lies in "realizability", and enterprises can achieve anything. However, in daily operations, inventory, materials and other assets with frequent turnover are closely related to operations. Simply put, the net realizable value is "the market value or estimated value of an asset-the expenses incurred in the sales process-the remaining part after deducting relevant taxes".