One of the four fundamental accounting concepts laid down in Statement of Standard Accounting Practice (SSAP) 2, Disclosure of Accounting Policies; it is also recognized in the Companies Act and the EU’s Fourth Company Law Directive. The concept requires consistency of treatment of like items within each accounting period and from one period to the next; it also requires that accounting policies are consistently applied. Under Financial Reporting Standard 18, Accounting Policies, which has now replaced SSAP 2, the consistency concept is no longer recognized as a fundamental principle. Rather, an entity is required to implement those policies that are judged most appropriate to its circumstances for the purpose of giving a true and fair view. Comparability is therefore held to be a more important characteristic of financial statements than consistency.
Subjects: Financial Institutions and Services — Accounting.