The 10th tutorial video on financial accounting explains the contraints of GAAP viz- materiality and conservatism in recording transactions. The constraints are concepts that relax the GAAP principles for e.g. materiality and conservatism. The assumption of materiality states that insgnificant amounts may be aggregated and treated as expense as it does not justify the full application of GAAP principles. Consevatism is the important concept pertaining to full and immediate recognition of all losses while recognizing revenues only when they are 100 percent assured. Sadly, many companies play to the stock markets and exagerrate revenues when they are not fully certain to realize and also understate costs sometime by depreciating it over years i.e. not fully writing off expenses and losses.