qualitative characteristics (topic 2)

Question 1

2 qualitative characteristics which provide guidance abt how to make financial reports and what to include:

Answer 1

• fundamental
• enhancing

Question 2

Fundamental qualitative characteristics:

Answer 2

• Relevance: the info provided must be helpful to decision making, guided by materiality (significance).
• Faithful representation: the info should be presented in a complete, neutral, error-free way.

Question 3

Enhancing qualitative characteristics:

Answer 3

• Understandability: present it clearly, concisely.
• Comparability: use consistent policies.
• Timeliness: release it before it loses value.
• Verifiability: representative of what occurred.