Contrast and compare the qualitative characteristics identified by the International Accounting Standards Board (IASB) with the qualitative...

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Accounting

Contrast and compare the qualitative characteristics identifiedby the International Accounting Standards Board (IASB) with thequalitative Characteristics identified by the Financial AccountingStandards of Statement of Financial Accounting Concepts (SFAC) No.2.

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The four qualitative characteristics identified by IASB are understandability relevance faithful representation and comparability In my understanding Understandability means that a qualified financial report should be easily read and should let the reader understand Understandability will increase when information is classified characterized and presented clearly and concisely to enable users comprehend their meaning Relevance means the capability of making a difference in the decisions made by users in their capacity as capital providers A relevant financial report should include both financial and nonfinancial information Such information should be able to provide insight into business opportunities risk as well as possible future scenario for the company Faithful representation is to faithfully represent economic phenomena which the information purports to represent annual reports must be complete neutral and free from material error Comparability is the quality of information that enables users to identify similarities in and differences between two sets of economic phenomena As per Statement of Financial Accounting Concepts No 2 Qualitative Characteristics of Accounting Information A Hierarchy of Accounting Qualities The characteristics of information that make it a desirable commodity can be See Answer

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