Definitions for "Cost Principle"
The cost principle states that assets and services acquired by a company must be stated at their cost with no adjustment to market value. (example: A building is purchased for $200,000 by a company, then it must be carried in its books at that value regardless of how much it has appreciated over time)
The practice of recording transaction at cost and maintaining this cost in the records until an asset, liability, or component of owner's equity is sold, expires, is consumed, is satisfied, or otherwise is disposed of.
The accounting principle that requires financial statement information to be based on actual costs incurred in business transactions; it requires assets and services to be recorded initially at the cash or cash equivalent amount given in exchange.
In governmental auditing, refers to the standards for determining costs allowed to be paid from Federal awards.