Prudence (Conservatism)
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MS: Konservatisme (Berjaga-jaga) · EN: Prudence (Conservatism) · ZH: 谨慎性（稳健性）
Meaning
Conservatism, or the prudence concept, is an accounting constraint that requires a business to be cautious by not overstating assets and revenue, and not understating liabilities and expenses. When two reasonable values exist, the lower value for an asset or revenue is chosen. The aim is to prevent profit and assets from being reported too optimistically.
Example
Kayu Furniture Shop holds stock that cost RM5,000 but now has a sale value of only RM4,000. Under the prudence concept, the stock is recorded at the lower value, RM4,000.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 4