In order to ensure application of the accounting concepts and principles, major accounting standard-setting bodies have incorporated them into their reporting frameworks such as the IASB Framework. Accounting Concepts and Principles include Prudence, Going Concern, Money Measurement, Matching, Materiality, Relevance, Reliability, Substance Over Form, Timeliness, Neutrality, Faithful Representation, Completeness, Comparability, Consistency, Understandability, Accruals, Business Entity & Realization Principle. As financial reporting involves significant professional judgments by accountants, these concepts and principles ensure that the users of financial information are not mislead by the adoption of accounting policies and practices that go against the spirit of the accountancy profession. He loves to cycle, sketch, and learn new things in his spare time. An example of such a case would be the trade off between relevance and reliability. Whether reliability of information may be compromised to ensure relevance of information is a matter of judgment that ought to be considered in the interest of the users of the financial information. Accounting Concepts and Principles are a set of broad conventions that have been devised to provide a basic framework for financial reporting. Information is more relevant if it is disclosed timely. Dual Aspect Concept | Duality Principle in Accounting, Realization Concept (Revenue Recognition Principle), Single Economic Entity Concept | Consolidation Accounting. Get weekly access to our latest lessons, quizzes, tips, and more! However, it may take more time to gather reliable information. Ammar Ali is an accountant and educator. Accountants must therefore actively consider whether the accounting treatments adopted are consistent with the accounting concepts and principles. Following is a list of the major accounting concepts and principles: In case where application of one accounting concept or principle leads to a conflict with another accounting concept or principle, accountants must consider what is best for the users of the financial information.