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Are we being examined on the prudence concept even though the concept is not applied anymore.
Also what is the difference between the prudence concept and the Accrual concept.
Prudence is still embedded in the IFRS’s.
Prudence is another word for being cautious, and is the idea that we only take profits when we are sure of them but record losses as soon as we foresee them.
The accruals concept is that we should record all expenses incurred in a period, regardless of how much has actually been paid.
These are all explained in full in my free lectures.
The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
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