Kostenhistorisch

Kostenhistorisch is a German accounting concept that refers to the historical cost method of valuing assets and liabilities. Under this approach, assets are recorded at the price actually paid for them, including purchase costs, taxes, installation, and any other costs necessary to bring the asset to its intended use. All subsequent changes in the value are not reflected in the balance sheet except through depreciation or impairment adjustments.

The principle is grounded in prudence and verifiability. It provides an objective and verifiable basis for reporting, as opposed to market-value approaches that may rely on estimates. In German commercial accounting governed by the Handelsgesetzbuch (HGB), the historical cost principle is mandatory for most assets, ensuring comparability among companies. The International Financial Reporting Standards (IFRS) also allow a historical cost option for certain financial instruments, while they generally favor fair-value measurement.

Advantages of the kostenhistorisch method include simplicity, lower volatility in reported earnings, and legal certainty. Disadvantages comprise lack of up‑to‑date information about the real economic value of assets, potential understatement of assets in inflationary periods, and reduced relevance for investors seeking current portfolio valuations.

Overall, kostenhistorisch remains a cornerstone of conservative financial reporting in Germany, reinforcing transparency through consistent and factual asset valuation.