1. The Qualitative Characteristics of Financial Information (Y7C2) 1. It is relevant. c. the concept of reporting entity. It is presented fairly. 3. The qualitative characteristics of financial information . According to the Conceptual Framework, predictive value and confirmatory value are ingredients of a. Relevance b. CH _APTER3 CONCEPTUAL FilAMEW ORl(Qualitative characteristics QUESTION 3--1 Define qualitati ve characteristics of financial sta teme nt s. ANSWER 3-1 Qualitative characteristics are the qualities or at tributes that make financial accounting information useful to th e users. Enhancing Qualitative Characteristics. A soundly developed conceptual framework of concepts and objectives should a. b. the objective of general purpose financial reporting. a. Qualitative characteristics are the attributes that make the information provided in financial statements useful to users. They are defined as follows: The fundamental qualitative characteristics: Relevance – financial information … The foundation of the Conceptual Framework is formed from a. the qualitative characteristics that makes information useful to users. Under the Conceptual Framework for Financial Reporting, qualitative characteristics are classified into fundamental qualitative characteristics and enhancing qualitative characteristics. According to the IASB’s Conceptual Framework for Financial Reporting, which TWO of the following are part of faithful representation? Relevant: The information should be relevant to the users so that they can make their decisions effectively. 2. Evaluating the Qualitative Characteristics: The above mentioned characteristics (relevance, materiality, understandability, comparability, consistency, reliability, neutrality, timeliness, economic realism) make financial reporting information useful to users. 26. The Framework sets out the qualitative characteristics of useful financial information. According to the framework, qualitative characteristics are the attributes that make the information provided in financial statement useful to users. 4. Qualitative Characteristics of Financial Statements. Chapter 2: Qualitative characteristics of useful financial information. It is neutral. These qualities are outlined in Chapter 3 of the Conceptual Framework for Financial Reporting, approved by the International Accounting Standards Board (IASB). Relevance: capable of making a difference in the users’ decisions. However, these characteristics are subject to cost constraints, and it is therefore important to determine whether the benefits to users of the information justify the cost incurred by the entity providing it. The conceptual framework sets out four qualitative characteristics of financial statements: Understandable: The users should be able to understand and appreciate the information. According to BDO (2010), the qualitative characteristics of useful financial information apply to True. These activities are time-consuming and costly. What are the qualitative characteristics of financial statements? d. the principles and objectives of presentation and disclosure of financial information… Fundamental qualitative characteristics. In order for the financial statements to be useful to the stakeholders of a business they must embody certain qualitative characteristics. In this Chapter, the Framework describes 2 types of characteristics for financial information to be useful: Fundamental, and ; Enhancing. Other aspects of the Conceptual Framework—the qualitative characteristics of, and the cost constraint on, useful financial information, a reporting entity concept, elements of financial statements, recognition and derecognition, measurement, presentation and disclosure —flow logically from the objective. Qualitative characteristics are the qualities or attributes that make financial accounting information useful to the users. The conceptual framework indicates that the primary users of financial information are investors, lenders, and other creditors who cannot demand information from the entity. In the conceptual framework, what are the two types of qualitative characteristics of financial information?