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Accounting Framework - Convention of Consistency
This doctrine denotes that accounting rules, practices & conventions should be continuously observed and applied that implies that these should not be changed from year to year or one year to another. Consistency could be in addition sub-divided into subsequent categories
(a) Vertical Consistency: Where the similar principle methods, practices are adopted inside interrelated financial statements of the similar date.
(b) Horizontal Consistency: It helps to make proper comparison of the operations of a company from one period to another.
(c) Third Dimensional Consistency: It helps to make a proper comparison of the operation among two firms with the similar industry.
It should be remembered that the doctrine of consistency does not preclude changes as long as of these changes are desirable and the effects of theme are made known.
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