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The prudence concept in accounting emphasizes caution and the avoidance of overestimating income or assets, ensuring that financial statements do not present an overly optimistic view of a company's financial position. Bringing appreciation into account could lead to inflated asset values and potential earnings, contradicting this conservative approach. By recognizing appreciation, financial statements could mislead stakeholders about the company's true financial health, undermining the reliability and accuracy that prudence seeks to uphold.

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4d ago

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