Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Qualitative characteristics are the qualities or attributes that make financial accounting information useful to the users. (DOC) Qualitative characteristics of accounting information | babua Palit - Academia.edu The assignment provides you with the opportunity to develop an in-depth understanding of measurement and recognition issues related to financial accounting. Clipping is a handy way to collect important slides you want to go back to later. DEFINITION : Making difference in a decision by helping users to form predictions about the outcomes of past, present and future events. By: Shachie Garcia, Angeline Bigornia, Aubrey Aba, 5X|�� @ [Content_Types].xml �(� ę�r� ���;ht�X�i���9$��2�����iP�N��EH�dW�d�K&X�۟Vh���^?�4ڀT��Y. QUALITATIVE CHARACTERISTICS OF ACCOUNTING INFORMATION Comparability Financial statements of one accounting period must be comparable to another in order for the users to derive meaningful conclusions about the trends in an entity's financial performance and position over time. 5. Enhancing Qualitative Characteristics 1) Comparability(including consistency) 2) Verifiability 3) Timeliness 4) Understandability Environment and Theoretical Structure of Financial Accounting * Materiality (make a difference on decision) Materiality judgment should be made in the context of the nature and the amount of the item. Fundamental Qualitative Characteristics 4. Scribd will begin operating the SlideShare business on December 1, 2020 Qualitative characteristics of accounting information that must be present for information to be useful in making decisions: 1. Those characteristics should be maximised both individually and in combination. Reliability: Reliability is described as one, of the two primary qualities (relevance and reliability) that … You can change your ad preferences anytime. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. This chapter considers the qualities of financial information … Major Ingredients: a) Predictive Value: - If the information can be used as an input for users making predictions. If you wish to opt out, please close your SlideShare account. See our Privacy Policy and User Agreement for details. Item. Financial statements of one entity must also be consistent with other entities within the same line of business. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. As of this date, Scribd will manage your SlideShare account and any content you may have on SlideShare, and Scribd's General Terms of Use and Privacy Policy will apply. Carlo Vitug, Thomas Diaz, and Kirk Chu. Enhancing Qualitative Characteristics. It requires that the financial information should be related or pertinent to the economic decision. Looks like you’ve clipped this slide to already. See our User Agreement and Privacy Policy. Comparability. If you continue browsing the site, you agree to the use of cookies on this website. Relevance 2. Representational faithfulness Users can … Transactions and events must be accounted for and presented in the financial statements in a manner that is easily understandable by a user. PK ! Comparability, verifiability, timeliness and understandability are directed to enhance both relevant and faithfully represented financial information. 1. Now customize the name of a clipboard to store your clips. Constraints on the qualitative characteristics 3.33 - 3.37 In deciding which information to include in financial statements, when to include it and how to present it, the aim is to ensure that financial statements yield information that is useful. As accountants, we are concerned about providing decision-useful information to the users of Primary Qualities of Accounting Information Capable of making a difference in the decision making of the user Must have predictive or feedback value Predicts or forecasts for users about the outcome of events of a company Learn more. Qualitative characteristics & accounting principles slide show game, constraints on relevant and reliable information, Chapter 6-THEORETICAL & CONCEPTUAL FRAMEWORK, BP KOIRALA INSTITUTE OF HELATH SCIENCS,, NEPAL, Online reporting- Processes and Lessons Learned, No public clipboards found for this slide, Qualitative Characteristics of Accounting Information. Relevance -means the capacity of the information to influence a decision.