Question

What is Fair Presentation and explain what its' characteristics are?

Answer 1

Answer Fair presentation relate to Fair presentation of financial statement of an organization. When financial statement shows true and fair position and it is free from material misstatements, then this presentation called fair presentation. Following are the some basis characteristics of fair presentation of financial statement-

•          It is a essential part of financial reporting.

•          This describes that financial transaction which having monetary value, to be recorded properly in books of accounts of an organization.

•          This shows that all current period incomes and expenses have recorded properly in income statement.

•          This shows that owner of business disclose also assets of Balance sheet at correctly and fairly valued, disclose and present and he have right over assets.

•          This show that all liabilities correctly and fairly value, present and disclose in financial statement.

•          Organization should fully comply with IFRS and this should be disclosed

•          If any complex transaction which not covered by any accounting standard that substance of the transaction should take precedence over the strict legal form of the transaction.

•          Organization should also fully comply with all relevant laws, rules, regulations, principal, and accounting slandered in preparation of financial statement.

•          All financial activity of business process of current period showing correct business result in forms of profit or loss.