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In accounting, the convention of conservatism, also known as the doctrine of prudence, is a policy of anticipating possible future losses but not future gains. It states that when choosing between two solutions, the one that will be least likely to overstate assets and income should be selected.
For example, choosing an "accelerated" depreciation method, or one that allocates a large amount of depreciation expense at the beginning of an asset's useful life, allows the firm to present abnormally high expenses for a given financial period and abnormally low expenses for future financial periods: conservatism, followed by aggressiveness.
Accounting constraints (also known as the constraints of accounting) are the practical limitations and guidelines that influence how financial statements are prepared and interpreted. These constraints acknowledge that ideal accounting practices may need to be adjusted due to factors like the availability of reliable information, the cost of ...
Turnover in accounting personnel or other deficiencies in accounting and information processes can create an opportunity for misstatement. As for misappropriation of assets, opportunities are greater in companies with accessible cash or with inventory or other valuable assets, especially if the assets are small or easily removed.
This helps explain the neverending identity crisis that shapes so much of the culture of American conservatives, which is engaged in constant arguments about what it means to be a true ...
Conservatism is a cultural, social, and political philosophy and ideology that seeks to promote and preserve traditional institutions, customs, and values. [1] [2] [3] The central tenets of conservatism may vary in relation to the culture and civilization in which it appears. [4]
Created Date: 8/30/2012 4:52:52 PM
The unit of account in economics suffers from the pitfall of not being stable in real value over time because money is generally not perfectly stable in real value during inflation and deflation. Inflation destroys the assumption that the real value of the unit of account is stable which is the basis of classic accountancy. In such ...