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CHER@MCG

Conservatism

losses should be recorded when probable, but gains are only recorded when certain, so that liabilities are not understated and assests are not overstated.

Historical Cost

transactions should be recorded at their original purchase price, as this value is verifiable by source document evidence.

Entity

the business is seperate from the owner and other entities and it's records should be kept on this basis.

Reporting Period

the life of the business is divided into 'periods' of time. Re ords should reflet the 'period' in which the transaction occurs.

Monetary Unit

all items must be recorded and reported in the currency of the country of which the reports are prepared

Consistency

the business should use the accounting methods to allow for the comparison of reports from one period to the next.

Going Concern

the life of the business is assumed to be continuous and its records are kept on that basis.

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