Accounting Principles

Historical Costing

The values assigned to assets and liabilities are the price that was paid or agreed on when first recognised

Matching Expenses

Principles called for expenses to be matched to the revenues they helped generate

Current cost

Asset value carried at the amount that the asset would cost to purchase currently, liabilities carried at the undiscounted amount that would be required to settle the obligation currently

Realisable Value

Assets carried at amount that could currently be obtained by selling it, liabilities carried at settlement value

Present Value

Assets are carried at the present discounted value of future net cashflows that is expected to be generated in normal course of business, liabilities carried at present discounted value of the future net cash outflows required to settle liabilities in the normal course of business

Source documents

Evidence of a transaction