Accounting Principles
Accounting principles are the standards and guidelines that guide the practice of accounting, guaranteeing the uniformity and reliability of a company's financial information.
Entity Principle
The entity principle states that the company is a separate entity from its owners, i.e. the assets and obligations of the company are not to be confused with the personal assets and obligations of the shareholders.
Principle of Continuity
The going concern principle assumes that the company will continue to operate indefinitely, unless there is evidence to the contrary. This influences the way assets and liabilities are valued.
Principle of Opportunity
The principle of timeliness determines that accounting information must be recorded at the time it occurs, guaranteeing the reliability of the data presented.
Principle of Recording at Original Value
According to the principle of recording at original value, assets must be recorded at the value at which they were acquired, without taking into account possible market variations.
Principle of Competence
The accrual principle states that income and expenses must be recognized in the period in which they occur, regardless of when payment is made.
Principle of Prudence
The principle of prudence guides accountants to adopt the lowest value for assets and the highest value for liabilities, avoiding overestimating the company's financial situation.
Principle of Consistency
The principle of consistency establishes that the accounting methods adopted by the company must be consistent over time, facilitating comparison between periods.
Principle of Materiality
The principle of materiality determines that only information that is relevant and significant for decision-making should be disclosed in accounting reports.
Transparency Principle
The principle of transparency states that accounting information must be clear, objective and accessible to all users, guaranteeing that the company is accountable.