IV Accounting Principles (PDF)

# IV Principes comptables fondamentaux ## A/ Les principes comptables fondamentaux retenus au Maroc The General Code of Accounting Standardisation CGNC has retained seven fundamental accounting principles: - **The principle of continuity of operations:** According to the principle of continuity o...

# IV Principes comptables fondamentaux ## A/ Les principes comptables fondamentaux retenus au Maroc The General Code of Accounting Standardisation CGNC has retained seven fundamental accounting principles: - **The principle of continuity of operations:** According to the principle of continuity of operations, the company must prepare its financial statements in the context of normal operations. Therefore, in the absence of any indication to the contrary, it is assumed that the company will continue its operations without any intention or obligation to liquidate or significantly reduce the scope of its activities. - **The principle of permanence of methods:** According to the principle of permanence of methods, the company prepares its financial statements by applying the same valuation and presentation rules from one financial year to the next. - **The principle of historical cost:** According to the principle of historical cost, the entry value of an item recorded in the accounting system for its amount expressed in current monetary units at the date of entry is considered to be a fixed value, regardless of any changes in the purchasing power of the currency or the current value of the item, subject to the application of the prudence principle. - **The principle of specialization of financial periods:** Due to the breakdown of the company's life into accounting financial periods, expenses and incomes must be allocated to the financial period that they concern, according to the principle of specialization of financial periods, and only to that year. - **The principle of prudence:** According to the principle of prudence, present uncertainties that may lead to an increase in expenses or a decrease in revenue for the financial period should be taken into consideration when calculating the result of that financial period. This principle avoids carrying over to future financial periods, expenses or reductions in revenue that should be charged to the current financial period. Under this principle, revenue is only recorded if it is certain and definitively received; on the other hand, expenses are recorded as soon as they are probable. - **The principle of clarity:** According to the principle of clarity – operations and information must be recorded in the accounts under the appropriate heading, with the correct name and without offsetting each other. - **The principle of significant importance:** According to the principle of significant importance, financial statements must disclose all items that may affect valuations and decisions. An item is considered significant if it is likely to influence the views of readers of financial statements on the company's assets, financial position and results.