Which enhancing qualitative characteristic means that information is received in time to influence decision making?

The following are all qualitative characteristics of financial statements.

Understandability

The information must be readily understandable to users of the financial statements. This means that information must be clearly presented, with additional information supplied in the supporting footnotes as needed to assist in clarification.

Relevance

The information must be relevant to the needs of the users, which is the case when the information influences their economic decisions. This may involve reporting particularly relevant information, or information whose omission or misstatement could influence the economic decisions of users.

Reliability

The information must be free of material error and bias, and not misleading. Thus, the information should faithfully represent transactions and other events, reflect the underlying substance of events, and prudently represent estimates and uncertainties through proper disclosure.

Comparability

The information must be comparable to the financial information presented for other accounting periods, so that users can identify trends in the performance and financial position of the reporting entity.

• 1 The qualitative characteristics of financial information
• 1.1 The fundamental qualitative characteristics:
• 1.2 The enhancing qualitative characteristics:

The qualitative characteristics of financial information

In order for the financial statements to be useful to the stakeholders of a business they must embody certain qualitative characteristics. They are defined as follows:

The fundamental qualitative characteristics:

Faithful representation – this means that financial information must be complete, neutral and free from error.

The enhancing qualitative characteristics:

Comparability – it should be possible to compare an entity over time and with similar information about other entities.

Verifiability – if information can be verified [e.g. through an audit] this provides assurance to the users that it is both credible and reliable.

Timeliness – information should be provided to users within a timescale suitable for their decision making purposes.

Understandability – information should be understandable to those that might want to review and use it. This can be facilitated through appropriate classification, characterisation and presentation of information.

Rating :

Tags:

Comparability is the qualitative characteristic that enables users to identify and understand similarities in, and differences among, items.

Unlike the other qualitative characteristics, comparability does not relate to a single item.

A comparison requires at least two items.

Consistency, although related to comparability, is not the same. Consistency refers to the use of the same methods for the same items, either from period to period within a reporting entity or in a single period across entities.

Comparability is the goal; consistency helps to achieve that goal. Comparability is not uniformity.

For information to be comparable, like things must look alike and different things must look different.

Comparability of financial information is not enhanced by making unlike things look alike any more than it is enhanced by making like things look different.

Which qualitative characteristics of accounting information is reflected when user of information is able to depend on the information?

What are the qualitative characteristics that enhance the decision usefulness of relevant information faithfully represented in financial statements quizlet?

Which of the fundamental and enhancing qualitative characteristics do you regard as most important for the preparers of financial statements and why?

What are the qualitative characteristics of the financial statements which improve the usefulness of the information furnished therein?