Nike, Inc. manufactures athletic shoes and related products. In one of its annual reports, Nike made this statement: “Property, plant, and equipment are recorded at cost.” Given that the property, plant, and equipment undoubtedly were purchased over several years and that the current value of those assets is likely to be very different from their original cost, what authoritative basis is there for carrying the assets at cost? Does accounting generally recognize changes in value after the purchase of property, plant, and equipment? Assume you are and accountant for Nike. Write a memo a management explaining the rationale underlying Nike’s approach.