What is a characteristic of historic costs?

Historic costs are primarily characterized by the fact that they represent the original purchase price of an asset at the time of acquisition. This price does not account for changes in market value, inflation, or other economic factors that can affect the asset's current worth.

The selection regarding the exclusion of intangible assets aligns with the nature of historic costs because these costs focus on tangible assets or the recorded expenses associated with acquiring those assets. Intangible assets, such as patents, trademarks, or goodwill, may not always be captured accurately in historic cost accounting or may not be reflected at all if they were developed internally and not purchased.

Therefore, it is accurate to say that historic costs may not include intangible assets, distinguishing them from methods that reflect current market conditions or potential future earnings.