This text outlines certain accounting principles applicable to a company's financial statements. Before applying paragraph 18, the amounts to be included in these financial statements will be determined based on principles outlined from paragraphs 12 to 17.

The following key principles apply:

• A company should operate under the presumption of continuing business.
• Accounting policies and measuring bases must be consistently applied year on year.
• Significant financial statement items ought to be decided based on a prudent basis. To elaborate:
• Only profits realised at the financial year end date are accounted for in the profit and loss account.
• All liabilities resulting from the financial year in question or a previous financial year must be accounted for. This includes liabilities apparent between the financial year end date and the signing date of the financial statements (as per section 324).
• Value adjustments due to devaluing must be recognised, regardless of profit or loss for the financial year in question.
• All income and expenses pertaining to the financial year should be accounted for, irrespective of the date of receipt or payment.
• The total of any item must be calculated by determining individual asset or liability amounts separately.
• Items in the profit and loss account and balance sheet must be accounted for based on their substance, abiding by the applicable accounting standards.

These principles do not need to be followed in cases where the sums involved are immaterial for providing a true and fair view.

Should the company directors have special reasons to deviate from these principles in preparing the financial statements, it is permitted, but the details, reasons and its impact on the company's balance sheet and profit and loss account must be clearly noted in the financial statements.