Definition of "Consistency concept"
In order to compare the financial statements of different years it is necessary to maintain consistency in the accounting policies followed by the business. Valuation of stock at cost or market price whichever is less is an exception to this rule. Accounting policies should be changed when there is compliance of law or in accordance with the accounting standards. A proper accounting policy should be consistently followed w.r.t. stock valuation, Depreciation and investment valuation.