I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

 

4

   Other accounting concepts 

There are other accounting concepts which are useful in the preparation of financial statements. 

4.1 Consistency  

To maintain consistency, the presentation and classification of items in the financial statements should 

stay the same from one period to the next, except as follows. 

(a) 

There is a significant change in the nature of the operations or a review of the financial 

statements indicates a more appropriate presentation 

(b) 

A change in presentation is required by an IFRS 

4.2 The business entity concept 

Financial statements always treat the business as a separate entity.  

It is crucial that you understand that the convention adopted in preparing accounts (the business entity