Comparability

Comparability means that users of accounting information should be able to explain the differences and similarities between different financial statements of different companies. Comparability may be the ultimate constraint, meaning that it may be above all of the other constraints because the goal of all financial statements is in fact comparability. Accounting information should be comparable across companies regardless of size and across time periods. Consistency in accounting practices over time permits valid comparisons among different reporting periods. Consistency requires that entities give accountable events the same accounting treatment from period to period. Consistency assures financial statement users that the company will account for similar transactions in the same fashion.