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حسابداری و مالی::
محافظه کاری، محافظه کاری
Cost Principle and Conservatism
Although accountants generally do not increase the value of an asset, they might decrease its value as a result of a concept known as conservatism.
If the net realizable value of his inventory is less than the original recorded cost, the principle of conservatism directs the accountant to report the lower amount as the asset's value on the balance sheet.
In short, the cost principle generally prevents assets from being reported at more than cost, while conservatism might require assets to be reported at less than their cost.
Accountants can show an amount less than cost due to conservatism, but accountants are generally prohibited from showing amounts greater than cost.،Keywords: earnings properties; debt contracts; cash flow prediction; conservatism
We directly examine the extent of conservatism and cash flow predictive ability of earnings used in performance covenants of private debt contracts.
In the next analysis, we use the Basu (1997) measure of asymmetric timely loss recognition to examine the extent of conditional conservatism in PERF COV EARNINGS and FASB GAAP
We find that our sample firms are similar to the broader sample of firms on the Dealscan database on a variety of characteristics including the levels of conservatism and cash flow predictive ability of FASB GAAP earnings.
Our results do not imply that conservative accounting is not desirable for elements of the debt contracts beyond performance covenants, nor do they imply conservatism in FASB GAAP is suboptimal in general.
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3
سیاسی و روابط بین الملل::
محافظهکاری
Conservatism and the U.S.
There are varieties of conservatism that are in conflict.
Defining Conservatism
Those who embark upon the task of defining conservatism are immediately confronted with a roadblock.
This is the commonly held view that conservatism is not a real ideology or philosophical position but ''merely a collection of emotional and pragmatic responses to change'' 20 by those with a vested interest in preserving the status quo.
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