A state of consistency that should exist across financial statements of an entity in a given period and at a certain reporting date. An example is consistency in relation to recording values in the statement of financial position (SFP) and treatment of related items in the statement of income (P&L). More specifically, an asset appearing on the SFP at cost should have its corresponding depreciation charged to the P&L on the same basis (at cost). An inconsistency arises when this asset is recorded on the SFP at cost, while its depreciation expense is computed and charged to the P&L using replacement cost.
In addition to vertical consistency, consistency comes in other forms, which are: horizontal consistency and third dimensional consistency.
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