The consistency It is a basic postulate established in the NIF A-1 which requires an entity to apply the same accounting treatment to similar transactions and events over time, provided that its economic substance.
This principle is essential to ensure the comparability of financial information between different periods and with other entities, since it prevents variations in results from being due to arbitrary changes in accounting criteria and not to economic reality.
Foundations of the consistency postulate
- Uniform application
The same type of transaction must be recorded under the same accounting criteria over time. - Choosing the right method
When NIFs allow for options, the treatment that best reflects the economic substance should be chosen and maintained. - Internal and external comparability
It facilitates comparison between different periods of the same entity and with other entities in the same sector. - Flexibility with justification
If a criterion no longer reflects economic reality, it can be changed, always disclosing the change and its effects.
Practical examples of consistency in accounting
1. Depreciation method
A company that uses the straight-line method to depreciate its machinery must maintain this method for that class of assets, unless the method of use changes and the change is justified.
Monthly accounting record:
Charge Depreciation Expense 5,000
Credit Accumulated Depreciation 5,000
2. Inventory valuation
If a company adopts the FIFO (First In, First Out) method to value inventories, it must maintain it over time to ensure comparability, unless there are technical reasons for changing it.
3. Revenue recognition in construction
A construction company that applies the work progress method according to NIF D-7 must maintain it for similar projects, avoiding alternating with completed work methods without justification.
Importance of consistency
- Allows you to analyze real variations in financial results.
- Facilitates comparison with companies in the same sector.
- Increases the transparency and credibility of financial information.
Conclusion
The consistency in accounting It is key to ensuring that financial statements are comparable and useful for decision-making. Although it promotes consistency, it should not prevent changes that improve the quality of information: if circumstances change, the criteria must be modified, always with justification and clear disclosure of the effects.
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