| Historical Cost |
Principle |
Assets are reported at their original acquisition price, not estimated market value. |
| Economic Entity |
Assumption |
The company's records are kept strictly separate from the owner's personal finances. |
| Going Concern |
Assumption |
Assumes the enterprise will operate indefinitely, justifying long-term asset deferrals. |
| Monetary Unit |
Assumption |
Only transactions quantifiable in currency are recorded; ignores inflation shifts. |
| Periodicity |
Assumption |
Business life is segmented into artificial time frames (months, quarters, years). |
| Full Disclosure |
Principle |
Disclose all relevant financial facts in notes (e.g., major lawsuits, debt covenants). |