Modifying conventions are customs emerging from accounting practice that affects the result that would be obtained from a strict application of accounting principles. These modifying accounting conventions are:
Modifying accounting conventions
1. Cost-benefit convention: According to this principle, the cost of applying an accounting principle should be less than benefits.
2. Materiality principle: Non-relevant information is not to be shown in the financial statements. More about Materiality Principle
3. Articulation: According to this convention, articulation is fundamentally related to financial statements.
4. Conservatism convention: Conservatism means being cautious and prudent and making sure that net assets and net income are not overstated.
5. Timeliness: One of the efficient accounting conventions is timeliness. The general users of financial statements can expect that the respective company would publish their financial statements on time.
6. Industry practice: There are some business organizations that are unique or peculiar by nature they need different types of accounting methods for a useful and realistic financial report.
7. Consistency: Consentience generally requires that a company use the same accounting principles and reporting practices over time.
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