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13 Cards in this Set
- Front
- Back
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predictive value |
•can be used as an input into processes that help predict futureoutcomes |
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relevance |
capable of making a difference in decision making |
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confirmatory value |
•provides feedback about prior evaluations |
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materiality |
•inaccurate or omitted information would affect the decisions made by the users of the financial statements |
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FAITHFUL REPRESENTATION |
depicts the substance of an entity completely, neutrally, and free from error |
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Free from Error |
•information should not contain errors or omissions inthe description of an event |
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Neutral |
•free from bias in both the selection and presentation of financial data |
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Completeness |
•includes all information that isnecessary for the user to understand the underlying economic event |
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Comparability |
•allowsusers of the financial statements to identifyand understand similarities and differences among different companies in thesame industry |
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Consistency |
•company uses similar accountingpolicies from year to year so that their financial statements are prepared on aconsistent basis |
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Verifiability |
•agroup of reasonably informed financial statement users are able to reach aconsensus decision that reported information is a faithful representation of anunderlying economic event |
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Timeliness |
•information is available early enough tomake a difference in decision making |
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Understandability |
•informationis classified, characterized and presented clearly |
