Genkashugi (English spelling) cost basis

Japanese: 原価主義 - げんかしゅぎ（英語表記）cost basis

This principle valuates a company's assets based on the amount spent to acquire them (acquisition cost), and is also called the historical cost principle or historical cost principle. Its characteristic is that the acquisition cost is determined through a transaction with an independent third party, so the amount is highly objective and highly verifiable. In addition, by combining it with the realization principle in the profit and loss calculation, it eliminates the recording of unrealized profits and valuation gains that lack financial backing. However, it also has disadvantages, such as not being able to show the current business status of a company or show the unrealized profits and losses of financial products.

Source: Encyclopaedia Britannica Concise Encyclopedia About Encyclopaedia Britannica Concise Encyclopedia Information

Japanese:

企業の資産をその取得のために支出した金額 (取得原価) によって評価する原則で，取得原価主義，歴史的原価主義とも呼ぶ。その特徴は取得原価が独立の第三者との取り引きにより成立するため，その金額は客観性が高く，検証可能性においても優れている点，また損益計算における実現主義と結びつくことにより，資金的裏づけに欠ける未実現利益，評価益の計上を排除している点である。しかし企業の現在の経営状態を示せない，金融商品の含み損益を表せないなどの欠点もある。

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