Why are most assets recorded at their historical cost under accrual accounting?

Assets are recorded at their historical cost under accrual accounting primarily because it minimizes market volatility. This approach ensures that the financial statements provide a consistent and reliable basis for understanding a company's financial position. Historical cost presents the amount paid for an asset at the time of acquisition, which does not fluctuate with market conditions or external factors over time.

By using historical cost, businesses can avoid the complexities and potential inaccuracies that come with frequent revaluations based on changing market conditions. This stability is crucial for users of financial statements, such as investors and creditors, who rely on consistent and objective data to make informed decisions.

In contrast, other methods that reflect ongoing market values can introduce significant variability and subjectivity, making it harder to assess a company's performance over time. Therefore, the focus on historical cost aids in achieving financial reporting consistency and reliability.