CON8.2 QUALITATIVE CHARATERISTICS

CON8.2 QUALITATIVE CHARATERISTICS - CON2 QUALITATIVE...

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CON2 QUALITATIVE CHARACTERISTICS
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Purpose The purpose is to examine the characteristics of accounting information that make that information useful.
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QUALITATIVE CHARACTERISTICS KEY CONCEPTS FUNDAMENTAL QUALITATIVE CHAR ENHANCING QUALITATIVE CHAR COST CONSTRAINT
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FUNDAMENTAL CHARACTERISTICS RELEVANCE PREDICTIVE VALUE CONFIRMATORY VALUE MATERIALITY (ENTITY-SPECIFIC) FAITHFUL REPRESENTATION COMPLETENESS NEUTRALITY FREE FROM ERROR
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RELEVANCE THE CAPACITY OF INFORMATION TO MAKE A DIFFERENCE IN A DECISION BY HELPING USERS TO FORM PREDICTIONS ABOUT THE OUTCOMES OF PAST, PRESENT AND FUTURE EVENTS OR TO CONFIRM OR CORRECT PRIOR EXPECTATIONS
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RELEVANCE - EXAMPLE SFAS No. 150: Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (Issued 5/03) The changes in this Statement will enhance the relevance of accounting information by providing more information about an entity’s obligations to transfer assets or issue shares, thus, improving its predictive value to users.
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PREDICTIVE VALUE THE QUALITY OF INFORMATION THAT HELPS USERS TO INCREASE THE LIKELIHOOD OF CORRECTLY FORECASTING THE OUTCOME OF PAST OR PRESENT EVENTS. Predictive value means value as an input into a predictive process, not value directly as a prediction.
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CONFIRMATORY VALUE THE QUALITY OF INFORMATION THAT ENABLES USERS TO CONFIRM OR CORRECT PRIOR EXPECTATIONS If the information confirms expectations, it increases the probability that the results will be as previously expected. If the information changes expectations, it changes the perceived probabilities of the previous possible outcomes.
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MATERIALITY AN ASPECT OF RELEVANCE ENTITY-SPECIFIC CHARACTERISTIC NO SPECIFIC UNIFORM QUANTITATIVE THRESHOLD NO PREDETERMINED AMOUNT FOR MATERIALITY
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MATERIALITY THE MAGNITUDE OF AN OMISSION OR MISSTATEMENT OF ACCOUNTING INFORMATION THAT, IN THE LIGHT OF SURROUNDING CIRCUMSTANCES, MAKES IT PROBABLE THAT THE JUDGMENT OF A REASONABLE PERSON RELYING ON THE INFORMATION WOULD HAVE BEEN CHANGED OR INFLUENCED BY THE OMISSION OR MISSTATEMENT SAB NO 99
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MATERIALITY It is quantitative in nature. The materiality judgment requires not only magnitude by itself but also the nature of the item and the circumstances in which the judgment has to be made. Materiality judgments are concerned with screens or thresholds. The more important a judgment item is, the finer the screen should be that will be used to determine whether it is material. The relative rather than the absolute size of a judgment item determines whether it should be considered material in a given situation. The amount of deviation that is considered immaterial may
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CON8.2 QUALITATIVE CHARATERISTICS - CON2 QUALITATIVE...

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