The historical cost concept is an important principle in accounting that states that assets should be recorded and reported at their original cost at the time of acquisition. This concept ensures that financial statements reflect the actual cost incurred by the entity to acquire the assets and helps in providing reliable and relevant information to users of financial statements. Here are three easy-to-understand standards related to the historical cost concept:

1. Historical Cost Principle:
The historical cost principle is the foundation of the historical cost concept. It states that assets should be initially recorded at the amount of cash or cash equivalents paid or the fair value of the consideration given to acquire them at the time of acquisition. This means that when an entity purchases an asset, it should be recorded at the actual cost incurred to acquire it, including any additional costs necessary to bring the asset to its present location and condition. For example, if a company purchases a building for $100,000, the historical cost principle requires the company to record the building at that amount on its balance sheet.

2. Cost Measurement:
The cost measurement standard is closely related to the historical cost concept. It states that the cost of an asset should include all expenditures directly attributable to its acquisition and preparation for use. This means that costs such as purchase price, transportation charges, installation fees, legal fees, and any other costs incurred to bring the asset into its intended use should be included in the historical cost of the asset. For example, if a company purchases a delivery truck, the cost measurement standard requires the company to include not only the purchase price of the truck but also any costs incurred to make the truck ready for use, such as registration fees or customization costs.

3. Conservatism Principle:
The conservatism principle is another standard that supports the historical cost concept. It states that when there are uncertainties or doubts about the value of an asset, it should be recorded and reported at the lower end of its cost or market value. This principle ensures that financial statements are not overstated and that any potential losses or risks are properly recognized. For example, if a company owns a piece of land, and there is a decline in the market value of land, the conservatism principle requires the company to report the land on its balance sheet at its historical cost or the lower market value, whichever is lower.

In conclusion, the historical cost concept in accounting is supported by various standards that help ensure assets are recorded and reported at their original cost. The historical cost principle, cost measurement standard, and conservatism principle are three important standards that students should understand to grasp the concept of historical cost accurately. These standards provide guidance on how to determine the cost of assets and how to report them in financial statements, ultimately contributing to the reliability and relevance of financial information.