Fundamental Accounting Assumptions:
It is generally assumed that financial statements are prepared on the basis of fundamental accounting assumptions. If nothing has been written about the fundamental accounting assumptions in the financial statements, then it is assumed that fundamental accounting assumptions have been followed in preparation fo financial statements.
If any fundamental accounting assumption has not been followed, then this fact must be disclosed in the financial statements.
Fundamental accounting assumptions are:
1. Going Concern
It means that the enterprise had an intention for continuing the business in the foreseeable future i.e. next one or two years.
It means, that the same accounting policies are followed from one period to another.
It means that the financial statement is prepared on the mercantile system only.
Other accounting assumptions like business entity, money measurement, matching are not fundamental accounting assumptions as per this accounting standard.