Debate: On the role of prudence in public sector accounting Hot

Prudence is one of the most important and most contentious accrual accounting principles as it means biasing accounting information on assets/revenues and liabilities/expenses asymmetrically. However, in internationally accepted accounting regimes the purpose of the prudence principle is defined to prevent overstating income and assets and understating revenues and liabilities. These two antagonistic interpretations of the prudence principle are discussed in this article.