Glossary
Consistency concept
Once a business chooses an accounting method, it keeps using it so results can be compared.
What it means
The principle that accounting methods, once adopted, are applied consistently from one period to the next unless a change is justified and disclosed.
Example
A business using the straight-line method keeps using it each year rather than switching to suit results.
Why it matters
It makes financial statements comparable over time, so trends reflect the business, not method changes.
In practice
Consistency does not appear as a figure. It governs how you prepare every statement year after year, so it shapes the choice of methods behind the income statement and statement of financial position.
Imagine a trader uses the straight-line method to depreciate a delivery van at RM2,000 each year. Under consistency, she keeps using straight-line in later years. She does not switch to reducing balance just because it flatters one year's profit. If she did switch, the lower depreciation charge would make profit look artificially higher and mislead anyone comparing the two years.
It is easily muddled with prudence, but they answer different questions. Prudence says not to overstate assets or profit. Consistency says to apply the chosen method the same way each period. A change is allowed only when it gives a fairer view, and it must then be disclosed.
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Related terms
Syllabus reference: Cambridge 0452 and 0985, syllabus for 2027 to 2029, sub-topic 7.1 Accounting concepts (page 19).
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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