What is the principle of robustness, and briefly describes its application in the physical accountin

1.The meaning of accounting conservatism.

There has been no unified definition of accounting conservatism in the industry, and this paper describes the meaning of accounting conservatism as follows: accountants should fully estimate the possible risks and losses in an uncertain accounting environment, and maintain the necessary caution when judging accounting information, based on the principle of not overvaluing assets or income, nor underestimating liabilities or expenses, so as to make appropriate and reasonable estimates of the recognition and measurement of accounting elements.

2.The importance of applying the principles of accounting conservatism.

The significance of the principle of accounting conservatism can be viewed from two aspects, one is the significance of the micro level, that is, the impact on individual enterprises; One is the macro-level significance, that is, the impact on the economy of the country as a whole:

First, at the micro level, the moderate application of robustness in the entire accounting work is a supplement to the insufficient measurement of the historical cost method, which can reduce the possibility of default of the contracting parties of the enterprise, improve the quality of accounting, reduce the cost of the enterprise, meet the needs of internal business decision-making, help protect the interests of the investors, help the enterprise avoid various business and investment risks, and strengthen the overall competitiveness of the enterprise;

Second, at the macro level, accounting conservatism is the inevitable product of the development of the socialist market economy, in line with the current actual situation of our country, and its moderate use is conducive to the establishment of a stable and reliable financial situation in China, is conducive to stabilizing prices, reducing economic instability, and ensuring the healthy and orderly development of the socialist market economy.

1.Definition of the Robustness Principle:The principle of conservatism, also known as the principle of prudence, refers to the need to be cautious when dealing with uncertain economic business of an enterprise.

In other words, all foreseeable losses and expenses should be recorded and recognized, while income that is not fully assured cannot be recognized and recorded.

Here are two definitions to help you understand the robustness principle:

2.Significance of following the principle of robustness:Under the conditions of market economy, enterprises will inevitably encounter risks, and the implementation of the principle of prudence can resolve risks before they actually occur, and prevent risks, which is conducive to enterprises to make correct business decisions, protect the interests of owners and creditors, and improve the competitiveness of enterprises in the market.

3.Application of the Robustness Principle:It can be understood as a requirement for accountants to "prudently" select accounting treatment methods and procedures according to the degree of accounting uncertainty when there are different accounting treatment methods and procedures to choose from in certain economic operations or accounting matters, under the premise of fully considering other accounting principles such as the principle of relevance, the principle of objectivity and the principle of proportionality.

Accounting System for Business Enterprises and the Principle of Conservatism The principle of conservatism, also known as the principle of prudence, refers to the fact that when the valuation of assets and the determination of profit or loss, if there are more than two methods or amounts to choose from, accountants should choose the method or amount that is more unfavorable to the net assets and profits of the current period.

In accounting work, the principle of conservatism is mainly manifested in the following aspects: deferring the recognition of income, recognizing expenses in advance, underestimating the value of assets, and overestimating the value of liabilities.

Article 11 of the Accounting System for Business Enterprises (hereinafter referred to as the "System") recently promulgated and implemented by the Ministry of Finance stipulates that "when conducting accounting, enterprises shall follow the requirements of the principle of prudence and shall not overcount assets or income, or undercount liabilities or expenses." ”

Mainly in the income, cost and expenses.