The convention of consistency signifies that the accounting practices and methods should remain consistent (unchanged) from one accounting year to another. In other words, accounting practises should remain the same from one period to another. Comparison of results from one period to another is possible only when same accounting rules are followed. For example, if a concern adopts Reducing Instalment method of depreciation in one year and Straight Line Method of depreciation in another year, then it will be difficult to make comparison between the results of the two periods. Sometimes, wrong conclusions may be drawn. If change becomes necessary the change and its effect should be stated clearly.
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