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.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Conservatism. Payroll & Accounting Heaven Ltd. September 28, 2021
Chicago Manual of Style (CMS):
Conservatism. Payroll & Accounting Heaven Ltd. (accessed: September 28, 2021).
American Psychological Association (APA):
Conservatism. Retrieved September 28, 2021, from website:

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.