prudence concept

prudence concept

the principle of commercial accounting that profits may not be anticipated in the books of a business; on the other hand, it is perfectly acceptable to make provision for losses as soon as they are foreseen. The term ‘prudence’, which is used to denote this style of accounting, developed during the 1970s; prior to that it had been known as ‘conservative’ accounting.
References in periodicals archive ?
This is why the prudence concept introduced by Kimball (1990a, 1990b) and assumptions about its behavior will be quite important for illustrating the main features of this type of policy.
Finally, no corresponding measures have been derived for the prudence concept, which, as we demonstrate below, is critical for characterizing the optimal reimbursement schedule.