Please describe enhancing qualitative characteristics of financial accounting reporting

Expert Solution

The concept of reporting entity is related to the user information needs of general purpose financial statements. The concept is tied to nature of general purpose financial statement and also with the information need of users. As per this concept individual entities must be identified in accordance with the needs of users of general purpose financial statements.

Four enhancing characteristics of useful financial accounting reporting

1. Comparability; an information is more useful if it can be compared with similar information about other entities. Information is said to be comparable when it is capable for identifying and understanding the similarities and differences among various items

2. Verifiability; Verifiability states that various knowledgeable and independent users could reach to a common decision up to some extent that facts and figures so depicted are represented faithfully. Verifiability can be direct or indirect

3. Timeliness; timeliness states for information to be useful, it must be presented on time. The more time information takes to process the less useful it becomes

4. Understanding; the information should be properly classified, Characterize and presented in a more precise and clear way so that it can be easily understandable

ekkarill92 answered 1 year ago

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