Historical Cost
Historical cost is the original cost for which the assets are acquired.
In a Balance Sheet, many assets are normally reflected at their cost price thus being expressed as historical cost.
Interest Cover
Interest cover indicates the number of times that interest charges are covered by EBIT (Earnings Before Interest and Tax) generated by the business. For example, a business has Earnings Before Interest and Tax of
$208,000, with an interest cost of $47,000.
The interest cover is:
$208,000
$47,000
Interest Cover = 4.4 times
