Consistency principle

The Consistency principle aims to preserve the comparability of financial statements. It requires that accounting practices and rules used in accounting are followed consistently from one period to the other. This increases the comparability of financial information when reviewing over different years.

For instance, if an organization is depreciating its fixed assets under straight line method then it should use the same method every year otherwise carrying value of assets will not be comparable and would require additional disclosures.

One thought on “Consistency principle”

  1. AntMiner Frimware says:

    Great article. Good to understand for everyone.

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