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Conservatism in accounting is the concept that its better for an accounting method to understate assets or profits rather than to overstate them. Although FASB

Conservatism in accounting is the concept that its better for an accounting method to understate assets or profits rather than to overstate them. Although FASB doesnt include conservatism as one of its underlying principles, it has nevertheless strongly influenced many accounting rules. Why do you think this principle is so widely used?

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