Consistency with reference to application of accounting procedures means ........

Principles of Accounting & Financial Management Concepts of Accounting

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Consistency with reference to application of accounting procedures means

All companies in the same Industry should use identical accounting procedures

Income & assets have not been overstated

Accounting methods & procedures shall be followed uniform basis year after year

Any accounting method can be followed as per convenience

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Explanation:

The consistency principle states that, once you adopt an accounting principle or method, continue to follow it consistently in future accounting periods so that the results reported from period to period are comparable. However, companies can change an accounting principle or method if the new version in some way improves the usefulness of the reported financial results. For instance, GAAP allows for several different ways of valuing inventory (goods held for sale in the ordinary course of business.)

During the first nine months of fiscal 2008, Home Depot implemented a new enterprise resource planning (“ERP”) system, including a new inventory system, for its retail operations in Canada and changed its method of accounting for inventory for its retail operations in Canada from the lower of cost (first-in, first-out) or market, as determined by the retail inventory method, to the lower of cost or market using a weighted-average cost method. This was disclosed, as required by GAAP, in the footnotes to the audited financial statements.