Glossary · Reading the business
In short
An accounting principle that assets are recorded at their original purchase price. This value isn't adjusted for inflation or market value changes.
While assets are listed at historical cost on the balance sheet, their fair market value for collateral purposes might be different. During due diligence, understand that inventory, equipment, and real estate are often valued at historical cost, which may not reflect current market worth or liquidation value.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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