Prudence

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Contents

Definition of Prudence

Revenues and profits should only be recognised once their realisation is reasonably certain. Conversely, liabilities are accounted for when they are foreseen.

Materiality

Materiality is an amount above which an item’s omission or misstatement would affect the view taken by a reasonable user of financial statements.

See also

Financial Training

Financial Training which uncovers Financial Jargon 

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