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7 April, 2016 - 15:36

The purpose of the consistency concept is to assure that financial statements can be easily compared period to period, and therefore to encourage that the same accounting principles be used from year to year. When changes in accounting methods are necessary, such changes should be disclosed and the reasoning explained in notes to financial statements. If businesses were allowed to change accounting principles whenever they wished, the amount of net income reported could continuously be manipulated. Different accounting methods may be used for different business segments.