The conservatism principle is the foundation for the lower of cost or market rule, which states that you should record inventory at the lower of either its acquisition cost or its current market value.
The principle runs counter to the needs of taxing authorities, since the amount of taxable income reported tends to be lower when this concept is actively employed; the result is less reported taxable income, and therefore lowers tax receipts.
The conservatism principle is only a guideline. As an accountant, use your best judgment to evaluate a situation and to record a transaction in relation to the information you have at that time. Do not use the principle to consistently record the lowest possible earnings for a company.