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The prudence concept of accounting allows to anticipate for the loss or decrease in value of an asset but it does not allow to anticipate for gain or revenue or an increase in the value of an assets regardless of how probable it is. A contingent liability is an anticipation of a an obligation to the company which can lead to losses when it happen.
Conservatism, also known as the doctrine of prudence in accounting
The conservatism principle is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.
