Going concern

Verifiable

Accounting period

Accounting entity

Comparable

Historical cost

Accounting equation

Monetary

Prudence

Timeliness

Materiality

Disclosure

1     

All relevant information and explanations about a business have been included in its financial reports.

2     

This concept results from the need to report profit for a particular, arbitrary period of time.

3     

It is customary to consider the business enterprise as separate from the personal affairs of the owner so that profit can be determined.

4     

This requires understating rather than overstating income and expense amounts that have a degree of uncertainty, so that financial statements do not overstate the company's financial position.

5     

Transactions are recorded using the amount paid (or payable) at the time of the transaction.

6     

For an accounting record to be made it must be able to be expressed in dollar terms.

7     

The treatment of an item in the financial reports of a business depends on its relevance and importance.

8     

This concept implies that financial statements do not represent a company's worth if its assets were to be liquidated, but rather that the assets will be used in future operations.