What are the exceptions to basic accounting principles

Learn about two accounting conventions that allow deviation from basic accounting principles: materiality and conservatism.

1. Difference between accounting conventions and concepts

There are two exceptions that permit companies to modify basic accounting principles (e.g., cost, full disclosure, matching):

  • Materiality
  • Conservatism

Materiality and conservatism could also be considered accounting conventions.

Accounting conventions are different from accounting concepts: while accounting concepts are established by pronouncements (e.g., U.S. GAAP), accounting conventions are established by common accounting practices. Some of the differences between accounting conventions and accounting principles (e.g., cost, going concern, matching) are listed in the table below:


Accounting Concepts

Accounting Conventions

Based on…

Assumptions that are foundations of accounting principles

General rule/agreement

Based on personal judgment





Not so much

Established by…


Common practice

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