What is the original price paid for a depreciable asset known as?

The term "Original Cost Basis" refers to the original price paid for a depreciable asset. This concept is fundamental in financial accounting and taxation, as it establishes the starting point for calculating depreciation over the life of the asset. The original cost basis includes not just the purchase price but also any additional costs necessary to prepare the asset for its intended use, such as transportation, installation, and any other relevant expenses.

This term is particularly important for determining the amount that will be depreciated over time, impacting financial statements and tax obligations. Understanding the original cost basis helps in accurately reporting asset values and calculating gains or losses when the asset is eventually sold or disposed of.

Other terms like "Acquisition Cost" or "Asset Value" may refer to similar concepts but are not as directly linked to the initial purchase price of the asset. "Fair Market Value" represents the current market price of the asset, which can differ from the original cost basis due to factors like depreciation, market conditions, or changes in demand.