What are the underlying characteristics which support relevance and faithful representation?

oliverstevenwarr
Note by oliverstevenwarr, updated more than 1 year ago
oliverstevenwarr
Created by oliverstevenwarr almost 5 years ago
15
0

Description

Characteristics of financial statements
Tags

Resource summary

Page 1

Comparability Information about a reporting entity is more useful if it can be compared with a similar information about other entities and with similar information about the same entity for another period or another date. Comparability enables users to identify and understand similarities in, and differences among, items. Verifiability Verifiability helps to assure users that information represents faithfully the economic phenomena it purports to represent. Verifiability means that different knowledgeable and independent observers could reach consensus, although not necessarily complete agreement, that a particular depiction is a faithful representation Timeliness Timeliness means that information is available to decision-makers in time to be capable of influencing their decisions. Understandability Classifying, characterising and presenting information clearly and concisely makes it understandable. While some phenomena are inherently complex and cannot be made easy to understand, to exclude such information would make financial reports incomplete and potentially misleading. Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyse the information with diligence.

Show full summary Hide full summary

Similar

What is meant by relevance and faithful representation?...
oliverstevenwarr
Financial Statements IASB Quiz
rachel_heap_02
Cost measurement
shuma32
Financial Ratios
Liz Barraclough
The double entry bookkeeping system
Debs Seed
How accounting is recorded
rachaellouise18
The IASB Conceptual Framework
Debs Seed
Statement of cash flow Flash cards
badloukbek
Main purpose and element of the Statement of Cash Flow
Sophie Ann Jones
statement of cash flow - QUIZ
kandiewhitehead