COST PRINCIPLE Definition

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COST PRINCIPLE is the principle where a company is obliged to record its fixed assets at their actual purchase price or production cost.

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FINANCIAL GEARING reflects any borrowing that the company may have undertaken. Operating income will become more volatile with increased financial gearing (borrowing). Thus the shares will have more risk attached to them. More borrowing, more risk. See GEARING and OPERATIONAL GEARING.

REPORT DATE is the date conclusions are transmitted to the client.

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