Het kostenconcept

The cost concept, or the exchange-price principle in accounting, states that transactions are recorded at the monetary value agreed upon by both parties. 
When a company purchases a long-term asset, the amount paid or the value of resources given up is recorded as its historical cost.
The cost includes all necessary expenses to prepare the asset for use, such as the purchase price, transportation, and installation.
For example, if a business buys a machine for fifty thousand dollars and pays five thousand dollars for installation, the historical cost is fifty-five thousand dollars.
Historical cost ensures consistency and is often used for assets like machinery or buildings.
As financial markets evolved, the limitations of this approach became evident.
The Financial Accounting Standards Board introduced fair value accounting in two thousand six. 
Under FASB ASC Topic 820, fair value is the price an asset would sell for in the current market. For instance, companies use fair value to price investment portfolios.
While historical cost ensures consistency, fair value offers timely, market-based insights, providing a fuller financial picture.