Accounting Concept is also known as Accounting Principles or Fundamental Accounting Concepts. It is the theoretical ideas formed to support the activity of accounting. Accountants have tried to develop such as framework. Various concept has been suggested and few have found universal recognition. The four fundamental concepts are the going concern concept, accruals concept, consistency concept and prudence concept. The four principles are laid down in Statement of Standard Accounting Practice 2, Disclosure of Accounting Policies. They are recognized by the UK Companies Act and Fourth Accounting Directive.
Currently the Statement of Standard Accounting Practice 2 has been superseded by Financial Reporting Standard 18 which was issued on December 2000. Based on the Financial Reporting Standard 18, the prudence and consistency concepts are no longer regarded as fundamental. The four key objectives which can be regarded as fundamental principles are relevancy, reliability, comparability and understandability.