Differentiate between accounting standards and accounting concepts.

The major differences between accounting standards and accounting concepts are as follows −

Accounting standards

  • These are uniform rules which started in 1950s and are rigid in nature.

  • Individuals, business firms should follow these standards.

  • Its main objective is to correct measurements and disclosure.

  • It creates more responsibilities.

  • There are various accounting standards, some of them are AS 1 disclosure of accounting policies, AS 3 cash flow statements, AS 6 Depreciation accounting etc.

Accounting concepts

  • There are various accounting concepts and they are customary and flexible in nature.

  • It offers liberty to follow various methods.

  • It is less responsible as compared to accounting standards.

  • It is independent of evolving needs of investment community.

  • Relevance, reliability, materiality, comparability, understandability, constraints of timeliness fall under accounting concepts.

Updated on: 25-Jul-2020

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