Objectivity Principle
The requirement that accounting information be based on objective, verifiable evidence rather than personal opinions, ensuring reliability in financial reporting.
Objectivity Principle
The accounting principle requiring financial statement information to be supported by independent, verifiable evidence rather than subjective opinions or estimates.
For example, when recording a land purchase, an accountant uses the amount on the legal sale document rather than a personal estimate of the land’s value, ensuring the transaction is recorded based on objective evidence.
Objectivity enhances the reliability and credibility of financial statements by minimizing bias and personal judgment. While complete objectivity is impossible due to the necessity of estimates in accounting, supporting documentation and independent verification help maintain reasonable objectivity in financial reporting.