What do you understand by the concept of conservatism ? Why is it also called the concept of prudence? Why is it not applied as strongly today as it used to be in the Past ?
The concept of conservatism means an accounting policy for anticipating all possible future losses but not for future gains. It's a policy to play safe by providing for future losses and not considering future gains. It is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.
A branch of accounting that requires a high degree of verification before making a legal claim to any profit. Accounting conservatism will recognize all probable losses as they are discovered and most expenditures as they are incurred. Revenue will be deferred until it is verified.