Asset valuation as an organizational and informational choice: historical cost, deprival value and fair value

This paper develops a conceptual analysis of asset valuation in accounting bymeans of a historical–theoretical reconstruction of the principles that have shapedvaluation practices over time, treating valuation not as a neutral technique but as ahistorically situated informational and organizational practice. It examines theenduring tension between the reliability traditionally associated with historical costand the relevance attributed to current value measures, situating this tension withinthe changing organizational and institutional purposes of financial reporting.Drawing on historical sources and accounting theory, the paper shows how earlyvaluation practices emerged as pragmatic responses to concerns such as fraudprevention, creditor protection, and taxation, before being progressivelyrationalised within economically grounded conceptual frameworks. Within thistrajectory, Baxter’s notion of value to the business is examined as a foundationalarticulation of entity-specific valuation and as a key antecedent of the deprivalvalue approach.The analysis engages directly with Zijl and Whittington’s (2006) reinterpretation ofdeprival value as a unifying conceptual framework capable of integrating entity-based valuation logics with market-oriented measures, including fair value. Ratherthan treating fair value as the culmination of conceptual progress, the paper arguesthat valuation methods reflect historically contingent choices about theinformational and organizational purposes of financial reporting, shaped byinstitutional priorities rather than by technical measurement criteria alone.By clarifying the conceptual relationships between historical cost, deprival value,and fair value, the paper reframes contemporary measurement debates asdisagreements about reporting objectives and institutional priorities rather than ascontests over technical measurement superiority.