Study Qualitative Characteristics of Useful Financial Information flashcards from Belle SM's class online, ... For example, the sales and profit reported by Reitmans in its comparative financial statements may be used along with other information to help predict future sales and profit. #whatisprciswriting, A-40 1201 Ithum Tower B Sector 62, Noida, Uttar Pradesh, Copyright ©2017 COC Education Pvt. lease are shown as an asset in balance sheet, even firm is not a legal owner. :-Information contained in     Qualitative Characteristics of financial statements . economic reality and not merely their legal form. Qualitative characteristics of financial information require that, in order to be useful for decision making, information should possess the primary characteristics of _____. Understandability: The information in the financial statements must be easily understandable. Therefore, financial statements need to have certain qualitative characteristics in order to … information is affected by its materiality. Enhancing qualitative characteristics of Financial Statements should be maximized by the entity to the extent necessary. 2 CON2 Status Page Qualitative Characteristics of Accounting Information May 1980 Financial Accounting Standards Board of the Financial Accounting Foundation 401 MERRITT 7, P.O. How we achieve the quality information? faithfully. Well to give you a simple example, we all use our experience to decide about something and certainly experience is always what we already know from the past. The objective was to demonstrate how the qualitative characteristics, as defined by the IASB can be operationalised. 3. 2009 [11]; Nobes & Stadler 2014 [12]) and, in our opinion, efficiently emphasized in the Statement of The transaction and It is the responsibility of the management to have an optimum mix of all four important qualitative characteristics of financial statements, Qualitative Characteristics of Financial Statements, International Accounting Standards (IASs), International Financial Reporting Standards (IFRSs), International Standards on Auditing (ISAs), free from errors, especially material errors. The qualitative concept improved is: A) Comparability. In this sense they are similar is using comparison of financial information over period. By the above discussion we can observe one fact that all four principal characteristics are interrelated and higher level is achieved in one area at the expense of the other. TECHNICAL SUPPORT OR LOGIN ID RELATED ISSUE: Please contact on the above given numbers. Qualitative Characteristics of Useful Information Drag and drop ID: 514348 Language: English School subject: Accounting Grade/level: Diploma Age: 18+ Main content: Financial Statements Other contents: Add to my workbooks (6) Download file pdf Embed in my website or blog Add to Google Classroom Add to Microsoft Teams Share through Whatsapp: Concepts Statement No. should be accounted and presented in accordance with their substance and Financial statements are quantitative statements, based on numbers. presented  faithfully. The complexity and multiplicity of the qualitative characteristics of financial statements are widely discussed in the scientific literature (Shahwan 2008 [10]; van Beest et al. Principle of fair disclosure implies all transaction vi) Understandability. Materiality :- Relevance of B) Consistency. Financial information is relevant if it would potentially affect or make a … Demo Classes for Accounts for CA/CMA/CS/B.Com:https://www.conceptonlineclasses.com/demovideos, Visit Webiste:https://www.conceptonlineclasses.com/, #QualitativeCharacteristicsoffinancialStatements. recorded in financial statement present true and fair view result of business. Ltd. All Rights Reserved. 6. Conceptual Framework Outline A. Adequate An omission may cause false or misleading and First, understandability is including taking into consideration users’ abilities, and aggregation and classification of information. 2. unreliable information. For example, assets taken on caution in exercise of judgments requires to estimate condition of uncertainty 8. Reliability: These include our emotions, the cultural situation, the medium used to communicate, and even our location. 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