According to International Accounting Standards,

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International Accounting Standards require that income should be recorded based on the realization principle, which means that revenue should be recognized when it is earned and not when the cash is received. The matching principle is also a common accounting principle, but it pertains to the matching of expenses to revenue in the same period. The liquidity principle is not a recognized accounting principle. Net income is calculated by deducting expenses from revenue, and it is affected by the realization principle. Depreciation is recorded as an expense, and it is not directly related to cash flows.