Instead, the company used historical cost accounting, which is legal.

The lack of transparency by using historical cost accounting may make matter worse.

There is no empirical evidence that using historical cost accounting will calm the investors.

In contrast, historical cost accounting, based on the past transactions, is simpler, more stable, and easier to perform, but does not represent current market value.

For instance, historical cost accounting yields much lower figures for depreciation than does inflation accounting.

In some cases, historical cost accounting didn't apply because there was little trading cost, (e.g. an interest-rate swap contract).

The Accounts have been prepared in accordance with applicable accounting standards and under the historical cost accounting rules supplemented by revaluation of certain properties.

Investors demanded for increased transparency, historical cost accounting was blamed for creating rooms for banks to underestimate their losses.

This is confirmed by PricewaterhouseCoopers: "Inflation-adjusted financial statements are an extension to, not a departure from, historical cost accounting."

Most principles of historical cost accounting were developed after the Wall Street Crash of 1929, including the presumption of a stable currency.

Equity: Equity is the residual interest in the assets of the enterprise after deducting all the liabilities under the Historical Cost Accounting model.

(2) Financial capital maintenance in nominal monetary units (Historical cost accounting): authorized by IFRS but not prescribed-optional during low inflation and deflation.

Some opponents may even suggest that historical cost accounting is more accurate by arguing that financial institutions are forced to record any permanent impairment in the market value of their assets.

Bankers and regulators concede there are abuses of historical cost accounting, but, in the phrasing of Winston Churchill, they say it is the worst system, except for all the others.

Furthermore, some entities use the current cost basis as a response to the inability of the historical cost accounting model to deal with the effects of changing prices of non-monetary assets.

Lessons from 1929 Stock Crash Under historical cost accounting, profits came to be calculated as the difference between the income accrued and costs incurred, according to revenue recognition and matching principal.

The Constant Item Purchasing Power Accounting model is an International Accounting Standards Board approved alternative basic accounting model to the traditional Historical Cost Accounting model.

The IASB's Framework introduced Constant Item Purchasing Power Accounting as an alternative to Historical Cost Accounting in 1989 in Par.

And in other cases, because of the existence of fairly liquid markets and the wide use of valuation methodologies in financial markets to set asset prices, the relevance of historical cost accounting is largely undermined.

Notwithstanding the above, companies are permitted to account for almost any financial instrument at fair value, which they might elect to do in lieu of historical cost accounting (see FAS 159, "The Fair Value Option").

Revenues and expenses are measured in nominal monetary units under the Historical Cost Accounting model and in units of constant purchasing power (inflation-adjusted) under the Units of Constant Purchasing Power model.

The stable measuring unit assumption (traditional Historical Cost Accounting) during annual inflation of 25% for 3 years in a row would erode 100% of the real value of all constant real value non-monetary items not maintained under the Historical Cost paradigm.

Fair value accounting (also called replacement cost accounting or current cost accounting) was widely used in the 19th and early 20th centuries, but historical cost accounting became more widespread after values overstated during the 1920s were reversed during the Great Depression of the 1930s.