QualCharConventions

QualCharConventions - Neutrality Can the information be...

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Qualitative Characteristics and Conventions of Financial  Accounting Information Financial Statements Qualitative Characteristics Conventions that  help in interpretation  of the statements Understandability Decision makers must be  able to interpret accounting  information, given they are  willing to learn to use the  information properly. Usefulness Accountants must provide information that  is useful in making decisions. Comparability and  Consistency Materiality Conservatism Full disclosure Cost-Benefit Relevance Feedback  value Predictive  value Timeliness Reliability Faithful  represen- tation Verifiability Neutrality Quality Question Understandability Can the information be used by those willing to learn to use it  properly? Relevance Would the information be useful in deciding whether or not to  loan money? Reliability Verifiability Representational  faithfulness
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Unformatted text preview: Neutrality Can the information be verified? Is the information free from error? Is there agreement between the information and the events represented? Is the information slanted in any way to present the company more favorably than is warranted? Comparability Are the methods used in assigning amounts to assets the same as those used by other companies? Consistency Are the methods used in assigning amounts to assets the same as those used in prior years? Materiality Will a specific error in any way affect the judgment of someone relying on the financial statements? Conservatism If there is any uncertainty about any of the amounts assigned to items in the balance sheet, are they recognized using the least optimistic estimate?...
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This note was uploaded on 04/12/2011 for the course ACCT 1310 taught by Professor Vickivorrell during the Spring '07 term at Cuyahoga CC.

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QualCharConventions - Neutrality Can the information be...

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