The conservatism concept in accounting: Evolution and the present time

Subject. This article deals with theoretical and methodological issues of the principle of conservatism in accounting, including its concept and history of development, criticism, psychological aspects, as well as the main approaches to assessing the impact of conservatism in reporting on the investment attractiveness of companies. Objectives. The article aims to study the historical development of the principle of conservatism in international and national accounting practices, analyze the main concepts proposed by the authors of studies on the influence of the principle of conservatism in the formation of financial statements on some economic indicators, conduct a comparative analysis of existing methods for assessing the extent of conservatism of corporate reporting, as well as identify the main disadvantages and advantages of application the principle of conservatism in the preparation of financial statements from the point of view of the informativeness of its content for stakeholders. Methods. For the study, I used the historical method, analysis, synthesis, and comparison. Results. The article finds that the exclusion of the principle of conservatism from the conceptual framework of accounting could be due to the current need of reporting users for more objective accounting information, prioritization of the verification function of standard financial reporting, as well as the development of modern technologies and the ability of users to independently conduct a more in-depth analysis of financial reporting data. The evolution of the principle of conservatism has led to changes in approaches to the valuation of assets and liabilities of companies, increasing the transparency and comparability of reporting. Conclusions. The article concludes that it is necessary to further reduce the subjectivity of value judgments on the financial performance of reporting companies. The use of modern technologies in the process of informing stakeholders about the activities of companies, as well as the improvement of the methodological and regulatory framework will help improve the quality of financial reporting, better meet the information needs of stakeholders, as well as improve the comparability of corporate reporting data.