Qualitative Characteristics of Accounting Information Qualitative characteristics are the attributes that make the information provided in financial statements useful to users. The four principal qualitative characteristics are understandability‚ relevance‚ reliability and comparability. It is also pointed out that these qualitative characteristics may need to be balanced against one another. (John Wiley& Sons Australia‚ Ltd‚ 2009) The relative importance of the characteristics in different cases
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2007 Accounting Information Qualitative Characteristics Gap: Evidence from Jordan Ahmad N. Obaidat Tafila Technical University‚ Tafila‚ Jordan [Abstract] The general objective of financial reporting is to provide useful information to present and potential investors‚ creditors‚ and others to help them make investment‚ credit‚ and other decisions. The purpose of this paper is to find out whether there is an existing gap concerning the importance of accounting information qualitative characteristics
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Qualitative Characteristics of Accounting Information Business owners can use accounting information to conduct a financial analysis of their companies’ operations. Accounting information often has quantitative and qualitative characteristics. Quantitative characteristics refer to the calculation of financial transactions. Qualitative characteristics include the business owner’s perceived importance of financial information. Business owners often require financial information
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TABLE OF CONTENTS CONTENT PAGE NUMBER INTRODUCTION 3-4 EXTERNAL USERS 4-5 FEEDBACK VALUES CHARACTERISTICS 6-7 FORECAST VALUES CHARACTERISTICS 7-9 SUMMARY 9-10 REFERENCES 11 Introduction Bursa Malaysia was in the beginning started as the Singapore Stockbrokers’ Association back in the year 1930. For Malaysia‚ it is the first official securities business organization
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Financial Reports is providing useful and valuable accounting information‚ which is an important basis to making appropriate decisions for information users. The quality of accounting information is directly related to information users in decision-making and its consequences. Hence‚ the four qualitative characteristics‚ namely Understandability‚ Relevance‚ Reliability and Comparability are set out in the conceptual framework to ensure that information users can make the right decisions. This essay will
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Qualitative Characteristics of Useful Financial Information The purpose of financial reporting is to provide decision makers with useful information. When accounting choices are to be made by individuals‚ those choices should be based upon the usefulness of that information to the decision making process. The Framework identifies six qualitative characteristics of financial statements as follows:- • relevance; • faithful representation; • comparability; • verifiability; • timeliness; and
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4 PRINCIPAL OF QUALITATIVE CHARACTERISTIC Understandability An essential quality of the information provided in financial statements is that it is readily understandable by users. For this purpose‚ users are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence. However‚ information about complex matters that should be included in the financial statements because of its relevance to the economic
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Characteristics of Information Good information is that which is used and which creates value. Experience and research shows that good information has numerous qualities. Good information is relevant for its purpose‚ sufficiently accurate for its purpose‚ complete enough for the problem‚ reliable and targeted to the right person. It is also communicated in time for its purpose‚ contains the right level of detail and is communicated by an appropriate channel‚ i.e. one that is understandable to
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enhancing qualitative characteristics of useful financial information? Objective of financial reporting and the capital markets The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors‚ lenders and other creditors in making decision about providing resources to the entity. Qualitative characteristics of useful information The Framework 2010 identifies two fundamental qualitative characteristics
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Dr Fang (to be used in the workshop in week 1) Month-end balance sheet amounts for the dental practice of Dr Fang‚ a local dentist‚ for three consecutive months are presented below. The information is complete except for the balance in the owners’ equity account. Cash Accounts receivable Prepaid insurance Surgery equipment Building Land Accounts payable Wages payable Mortgage payable Owners’ Equity 31 October $ 9 100 16 100 700 29 800 81 000 33 000 10 100 5 100 34 700
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