Conservatism

Business, Legal & Accounting Glossary

Definition: Conservatism


Quick Summary of Conservatism


Sometimes used with a stronger meaning of understating assets and overstating liabilities.




What is the dictionary definition of Conservatism?

Dictionary Definition


  1. A political philosophy that advocates traditional values.
  2. A risk-averse attitude or approach.

Full Definition of Conservatism


In business, investment, and accounting, the principle or convention of Conservatism has at least two meanings.

In investment and finance, it is a strategy which aims at long-term capital appreciation with low risk. It can be characterized as moderate or cautious and is the opposite of aggressive behaviour.

In accounting, it states that when choosing between two solutions, the one that will be least likely to overstate assets and income should be selected.


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Definition Sources


Definitions for Conservatism are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 18th April, 2020 | 4 Views.