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Paper            1     Principles and Practices of Accounting                Theoretical Framework 1.17





           1.12.8 Realisation Concept


           Any change in value of an asset has to be recorded only when the business realises it.
           However, a more conservative path is followed by accountants. They do not cover any
           probabale gain but try to cover all probable losses. That is to say, if accountants antic-
           ipate decrease in value, they account for it, but if there is increase in value they ignore
           it until it is realised.
             However, now-a-days, revaluation of assets has become a widely accepted practice
           when the value change is of permanent nature. Accountants adjust the change in value
           through creation of revaluation reserve.


           1.12.9 Dual Aspect Concept


           This concept is the core of double entry book-keeping. Every event or transaction has
           two aspects.

           Increase in Asset   = Decrease in Asset ¯  / Increase in Liability        ¯
                                ¯
           Decrease in Asset  ¯  = Increase in Asset   / Decrease in Liability ¯
                                                           ¯
           Increase in Liability    = Increase in Asset    / Decrease in Liability ¯
                                                             ¯
                                   ¯
           Decrease in Liability ¯ = Decrease in Asset ¯ / Increase in Liability       ¯


                                              =                                  Asset
                                 Asset                   Liability









                                              =           Asset

                                 Asset                                          Liability







                                              =                                 Liability
                                Liability                 Asset









                                              =                                 Liability


                                Liability                 Asset






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