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Please describe what are the fundamental qualitative characteristics of financial information?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Renju M.R asked over 2 years ago

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3 Answers
Open uri20170510 32134 1ue0f38?1494421710 rohit agarwal answered over 2 years ago

Please describe what are the fundamental qualitative characteristics of financial information? Qualitative characteristics are the attributes that make the information provided in financial statements useful to users. Please describe what are the fundamental qualitative characteristics of financial information? According to the Framework, the four principal qualitative characteristics are: (1) Understandability (2) Relevance (3) Reliability (4) Comparability Please describe what are the fundamental qualitative characteristics of financial information? Understandability refers to information being readily understandable by users who have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence. Relevance” refers to information being relevant to the decision-making needs of users. Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present, or future events or confirming, or correcting, their past evaluations. “Reliability” refers to information being free from material error and bias and can be depended on by users to represent faithfully that which it either purports to represent or could reasonably be expected to represent. “Comparability” refers to information being comparable through time and across entities. To achieve comparability, like transactions and events should be accounted for similarly by an entity throughout an entity, over time for that entity, and by different entities. Please describe what are the fundamental qualitative characteristics of financial information? Thanks & Regards

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Open uri20170510 32134 1c996lj?1494421732 Anil answered over 2 years ago

Following are the qualitative characteristics of financial information 1. Relevance - Relevance requires financial information to be relevant to the decision making needs of the users 2. Materiality - Materiality requires accountants and auditors to focus on financial information which is expected to affect the decisions of the users 3. Faithful representation - Faithful representation requires the financial information to be true and fair and free from misstatement 4. Comparability - Comparability requires the financial information to be comparable across periods and across companies 5. Verifiability - Verifiability requires the information to communicate the underlying economics of the company's

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Open uri20170510 32134 ivjxpn?1494421728 Shreedhar Sutar answered over 2 years ago

Hi Renju M.r Following are the qualitative characteristics of financial information 1. Relevance - Relevance requires financial information to be relevant to the decision making needs of the users 2. Materiality - Materiality requires accountants and auditors to focus on financial information which is expected to affect the decisions of the users 3. Faithful representation - Faithful representation requires the financial information to be true and fair and free from misstatement 4. Comparability - Comparability requires the financial information to be comparable across periods and across companies 5. Verifiability - Verifiability requires the information to communicate the underlying economics of the company's 6. Timeliness - Timeliness requires disclosure of financial information not to be excessively delayed 7. Understandability - Understandability requires the financial information to be understandable by users with reasonable knowledge of business

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