The Fundamental And Enhancing Qualitative Characteristics

Front 1

relevance

Back 1

useful information is relevant if it is capable of making a difference in the decisions made by users.

Front 2

faithful representation

Back 2

financial statements must faithfully represent the transaction and events (economic phenomena) that they purport to represent. Faithfully represented information is complete, neutral and free from error.

Front 3

comparability

Back 3

users need to be able to compare the financial statements of an entity through time and the financial statements of different entities.

Consistenvy helps to achieve comparability. Similar items must be treated in the same way. Items must normally be treated in the same way from one accounting period to the next. Entities must disclose the accounting policies adopted in financial statements.

Front 4

verifiability

Back 4

information is verifiable, it means that a different knowledgeable and independent observers could reach an agreement that a particular way of presenting an item is a faithful representation.

Front 5

timeliness

Back 5

information must be available to decision makers in time to be capable of influencing their decisions. The older information is, the less useful it is.

Front 6

understandability

Back 6

classifying characterising and presenting information clearly and concisely makes it understandable.