Conservation of Assets - SS1 Accounting Lesson Note

The conservation of assets is the fundamental principle that a company should use its assets wisely and carefully to preserve their value and ensure their longevity, as well as ensuring the long-term sustainability of a company's operations and success.

This means that a company should take steps to protect its assets from loss, damage, or theft. For example, a business should implement security measures to prevent theft, regularly maintain and repair its equipment and machinery to prevent damage, and have insurance policies in place to cover losses.

A company should also use its assets efficiently and effectively to maximize their value. This means that a business should only invest in assets that are necessary for its operations and use them in a way that produces the best possible results.

The conservation of assets is important because it helps a company maintain its financial stability and profitability. By protecting and using its assets wisely, a business can reduce costs, increase productivity, and maintain its competitive edge in the market.