Objectives and Qualitative Characteristics

Question 1

Can I depend on it Conceptual Framework?

Answer 1

Faithful Representation

Question 2

Does it Relate to my decision Conceptual Framework?

Answer 2

Relevance

Question 3

Complete, Neutral, Free from Material Error

Answer 3

Qualitative Characteristics of Faithful Representation

Question 4

Predict, Confirm, Material

Answer 4

Qualitative Characteristics of Relevance

Question 5

Provides consistent direction for the development of specific GAAP

Answer 5

Conceptual framework

Question 6

1. Comparability
2. Verifiability
3. Timeliness
4. Understandability

Answer 6

Enhancing characteristics

Question 7

Information is truthful

Answer 7

Free from errors

Question 8

To be relevant, accounting information should assist decision makers in confirming past predictions

Answer 8

Confirmatory Value

Question 9

To be relevant, accounting information should assist financial statement users in making predictions about future events

Answer 9

Predictive Value

Question 10

Provides information about the entity to current and future users of the financial statements who are making credit and investment decisions

Answer 10

Financial Reporting

Question 11

Information is verifiable if different knowledgeable and independent observers can reach similar conclusions

Answer 11

Verifiability

Question 12

Decision makers; mainly potential investors, creditors, and regulators

Answer 12

Target Audience of Financial Statements