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21 Cards in this Set
- Front
- Back
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Qualitative Characteristics of Accounting
Information |
IASB identified the Qualitative Characteristics ofaccounting information that distinguish better (more useful) information frominferior (less useful) information for decision-making purposes.
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relevant
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accounting information must be capable of making a difference in a decision
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predictivevalue
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if it has value as an input topredictive processes used by investors to form their own expectations about thefuture.
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Confirmatory value |
Relevant information also helpsusers confirm or correct prior expectations. |
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Materiality |
Information is materialif omitting it or misstating itcould influence decisions that users make on the basis of the reportedfinancial information. |
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Faithfulrepresentation |
means that the numbers anddescriptions match what really existed or happened. |
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Completeness |
means that all the information thatis necessary for faithful representation is provided. |
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Neutrality |
means that a company cannot selectinformation to favor one set of interested parties over another. |
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freefrom error
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more accurate |
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comparable |
Informationthat is measured and reported in a similar manner for different companies |
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Verifiability |
occurs when independent measurers,using the same methods, obtain similar results.
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Timeliness |
means having information availableto decision-makers before it loses its capacity to influence decisions. |
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EconomicEntity |
companykeeps its activity separate from its owners and other business unit |
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GoingConcern
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companyto last long enough to fulfill objectives and commitments
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MonetaryUnit |
moneyis the common denominator |
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Periodicity |
companycan divide its economic activities into time periods |
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AccrualBasis of Accounting |
transactions are recorded in theperiods in which the events occur.
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HistoricalCost |
generallythought to be a faithful representation of the amount paid for a given item |
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Fairvalue |
uis defined as “the price that would bereceived to sell an asset orpaid totransfer a liability in an orderly transaction between market participants at the measurement date.” |
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ExpenseRecognition |
- Outflows or “using up” of assets orincurring of liabilitiesduring a period as a result ofdelivering or producing goods and/or rendering services |
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Full Disclosure
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Providing information that is of sufficientimportance to influence the judgment and decisions of an informed user.Provided through:uFinancialStatementsuNotesto the Financial StatementsuSupplementaryinformation
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