Explain the 4 enhancing qualitative characteristics of financial information in general purpose financial reports.

Expert Solution

The four enhancing characteristics of financial information in grneral purpose financial reports are as follows,

1. Understandability: The main characteristic of general purpose financial reports are they should be easily understandable to the relevant people including those who don't have much of accounting knowledge.

2. Relevance: The financial information which is being reported in the reports should be relevant to the decision making of the stakeholders.

3. Reliability: The core characteristic of financial reports is reliability one should be able to rely on the information provided in the reports and such information should not be misleading the intended users.

4. Comparability: The last but not the least, the financial reports should be comparable with the reports of other entities. To make this possible the reports should be prepared based on the IFRS standards which are followed universally.

ekkarill92 answered 1 year ago

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