Matching principle

Costs are recognised in the same period as the revenue they helped generate, rather than when they were paid.

Buy a machine for ₹480 crore that produces revenue for eight years, and it's charged at ₹60 crore a year, so each year carries its share of the cost of producing that year's sales.

Matching is what turns an income statement into a measure of a period's performance. Without it the statement would only record bank transactions. It's also why depreciation, provisions and deferred costs exist at all.

It also creates every judgement you'll have to check.