Fair Value Accounting with Historical Cost Reality Check by: Kenneth
It does seem that if an asset increases substantially, a financial statement user would like to know that the value is say $100,000 and not $20,000.
Interesting point about keeping some part of historical cost, since historical cost even attempts to adjust asset values while keeping them anchored in the historical cost principle (cost less depreciation for PP&E, lower of cost or market for inventory, etc).
The values could be lowered, but not increased. Maybe fair value should include a disclosure of the original cost. At least then financial statements users could use their own judgment, and look at what caused this $80,000 gain and what the gain is based on.
