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Generally Accepted Accounting Principles (GAAP) and Basic Accounting Concepts 3.5
Consistency Concept is presumed to have been followed. It means that while preparing
the financial statements it is presumed to have been followed unless it is stated otherwise
in the financial statements, i.e., the enterprise is not a going concern. If the enterprise is
not a going concern, the financial statements will be prepared differently than the regular
financial statements.
 Conservatism or Prudence Concept.
Under this concept, prospective losses are recognised (accounted) but prospective
incomes are not. This concept is often described as “Do not anticipate profits, but provide
for all losses”.
 Timeliness.
This concept requires that financial statements or information should be made available
to the user within a reasonable time as the information not provided within reasonable
time losses its importance and relevance.