Some Modifying Conventions

Keep these Modifying Conventions in mind with the FASB's Conceptual Framework. 
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• Conservatism – Practice of prudence (especially during times of uncertainty) – i.e. expenses and liabilities recognized asap; revenue and assets be recognized when best assured; lower of cost or market theory (recognizing the lower of one cost vs the other).
• Industry Practices – may be necessary to depart from GAAP due to unique nature in industry it operates
• Substance Over Form – report economic substance of events over its legal form
• Materiality – items are material if it can influence decisions of potential investors, taken on the basis of the financial statements