Disadvantages of historical cost accounting?

Can anybody elaborate on the disadvantages of historical cost accounting?

Criticisms of the historical cost method

Historical cost method, over a period of time has been subject to many criticisms, especially as it considers the acquisition cost of an asset and does not recognise the current market value. Historical costs is only interested in cost allocations and not in the value of an asset. While it tells the user the acquisition cost of an asset and its depreciation in the following years, it ignores the possibility that the current market value of that asset may be higher or lower than it suggests.

Another main criticism of historical accounting method is its obvious flaws in times of inflation. The validity of historic accounting rests on the assumption that the currency in which transactions are recorded remains stable, i.e. its purchasing power remains the same over a period of time. Another main point with regards to inflation is rise in prices for an asset. An asset purchased at a point in time may be expensive in future. The traditional accounting principles record all assets at an original cost and continue to use these historic figures throughout the asset's life, while economists make a more intelligible assumption that money has a time-value attached to it. The economist's approach is broadly embraced in the corporate finance model whose objective is centred on value creation for the shareholders.

In addition effects of inflation may not be the same for all the companies in the market and historical cost accounts become almost unhelpful when comparing corporate performance. (Con'td at the 1st link)

The disadvantages of hca include the fact that hca values can relate to transactions that could be a year old, 10 years old and as much as 100 years old. It's true that some businesses have old equipment and old stocks (inventories) that are still working well but that were bought a long time ago: the problem is that the acquisition value may be out of date and so the balance sheet is showing out of date values. Taxation problems come with inflation accounting. In times of high levels of inflation, profits are inflated and therefore the tax bill tends to increase: this is the reason that inflation accounting was developed in the UK and elsewhere in the 1970s and onwards. Guess what, though? Accountants found solutions to the inflation accounting problem that led to lower taxation but the Inland Revenue didn't like what the accountants had done and rejected the accountants' proposals ... and so it went on. (Cont'd at the 2nd link)