2. Money Measurement Principle= According to the Money Measurement Principle, transactions and events that can be measured in money terms are recorded in the books of accounts of the enterprises. For example, ABC ltd. has 10000 cash, 10000kg wood, and 1000 litre oil. These assets cannot be added and shown in the financial statement unless their monetary value is ascertained.
3. Accounting Period principle= According to the Accounting period Principle, the life of an enterprises is broken into smaller periods so that its performances is measured at regular intervals. Such as monthly, quarterly, half yearly, yearly etc.
4. Accrual Assumption= According to this accrual assumption, a transaction is recorded in the books of accounts at the time when it is entered into and not when the settlement takes place. For Example credit sale of worth 10000 to ram and received amount on next accounting year.
5. Consistency assumption = According to the Consistency Assumption, accounting practices once selected and adopted , should be applied consistently year after year. For example, methods of depreciation, basis of accounting etc.
6. Accounting Entity or Business entity principle= According to the Principle, business is considered to be separate and distinct from its owners. Business transactions ,therefore, are recorded in the books of accounts from the business point of view and not from that of the owners.
7. Full Disclosre Principle= According to the Principle of Full Disclosure ,there should be complete and understandable reporting on the financial statement of all significant information relating to the economic affairs of the entity.
8.Materiality Principle=Materiality principle permits other concepts to be ignored ,if the effect is not considered material. This principle is an exception of full disclosure principle. According to materiality principle ,all the items having significant economic effect on the business of the enterprises should be disclosed in the financial statement and any insignificant item which will only increase the work of the accountant but will not be relevant to the users’ need should not be disclosed in the financial statements.
9.Prudence or Conservatism Principle= The Prudence Principle is many a time described using the phrase , Do not anticipate a profit ,but provide for all possible losses. In other words ,it takes into consideration all prospective losses but not the prospective profits. For Example ,provisions, reserve etc.
10.Cost or historical cost Principle= According to the Cost Concept, an asset is recorded in the books of accounts at the price paid to acquires it and the cost is the basis for all subsequent accounting of the asset. Asset is recorded at cost at the time of its purchase . For example ,an asset is purchase at worth 10000 during the accounting year the value of asset may be inc. or dec. but asset are recorded on the original price.
11.Matching concept or principle= According to this principle ,An important objective of business is to determine profit periodically. It is necessary to match (revenues) of the period with the (expences) for the accounting period.
12.Dual aspect or Duality Principle=According to the principle , every transactions entered into by an enterprises has two aspects , Debit or Credit of equal amount.
13.Revenue Recognition Concept=This Principle says that revenue is considered to have been realized when a transaction has been entered into and the obligation to receive the amount has been established.
14. Verifiable objective concept = The Verifiable Objective Concepts holds that accountin should be free from personal bias. Measurements that are based verifiable evidences are regarded as objectives. For example ,cash memo ,invoices ,sales bills , etc.
IASC=International Accounting Standard Committee
ASB=Accounting standard Board
IASB=International Accounting Standard Board
IFRS=International Financial Reporting Standard
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