what do you understand by the concept of conservatism ? why is it also called the concept of prudence? why is it not applied as strongly today as it used to be in the past ?
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Conservatism:
It is a concept of recognizing expenses and liabilities when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.
Prudence:
When Income is a certain, but the amount is uncertain, we take an estimated approach, which is known as prudence.
It is a concept of recognizing expenses and liabilities when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.
Prudence:
When Income is a certain, but the amount is uncertain, we take an estimated approach, which is known as prudence.
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