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MindMap Gallery Qualitative Characteristics (QC)

Qualitative Characteristics (QC)

This is a mind map about Qualitative Characteristics (QC),Main content: Enhancing QC (CVTU),Fundamental QC.It outlines key principles like relevance, substance over form, completeness, and faithful representation. It also covers concepts such as comparability, verifiability, and timeliness, highlighting their importance in providing information that is clear, accurate, and useful for decision-making.

Edited at 2024-11-09 04:56:29

Recent works View more works>>

Qualitative Characteristics (QC)
This is a mind map about Qualitative Characteristics (QC),Main content: Enhancing QC (CVTU),Fundamental QC.It outlines key principles like relevance, substance over form, completeness, and faithful representation. It also covers concepts such as comparability, verifiability, and timeliness, highlighting their importance in providing information that is clear, accurate, and useful for decision-making.

Qualitative Characteristics (QC)

Recent works View more works>>

Qualitative Characteristics (QC)
This is a mind map about Qualitative Characteristics (QC),Main content: Enhancing QC (CVTU),Fundamental QC.It outlines key principles like relevance, substance over form, completeness, and faithful representation. It also covers concepts such as comparability, verifiability, and timeliness, highlighting their importance in providing information that is clear, accurate, and useful for decision-making.

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Qualitative Characteristics (QC)

Fundamental QC

Relevance

Will influence economic decision of the users

Predictive

could evaluate and assess

past events

present evants

future events

Confirmatory

could confirm/correct

past evaluation and assessment

Should include material information in financial statements

requirement judgement to define materiality

information is material if

omit

mistate

it will influence economic decision of users

obscure

Threshold quality

there is a cut-off point, if information is not material, it does not need to be considered further

Faithful representation

SUBSTANCE OVER FORM Present information according to their substance and econmic reality, not merely their legal form

Completeness

contains necessary descriptions & explanations

no omission of material information

Neutrality

free from bias

prudence

i.e., assets & incoome

no overstated/understated

i.e, liabilities & expenses

no overstated/understated

Free from error

Enhancing QC (CVTU)

Comparability

Trend analysis of an entity (over time)

Therefore, disclosure of accounting policy should be consistent

IAS 8 if a company change accounting policy, prior year FS should be changed as well

With different entities

Verifiability

Knowledgeable users agree FS to be faithful represented

i.e., auditors

Timeliness

The older the information, the less useful it is

Provide information to decision makers in time

as it is capable to influence their decisions

Understandability

Clearly & concisely

Assumed primary users have reasonable knowledge of the business and economic activities

Assumed users will review & analyse information diligently

The objective of financial reporting

Provide financial information that is useful to the primary users of financial statements

Existing & potential investors

Lenders

to make decisions about providing resources (finance)

Others creditors

Provide useful financial information takes time & costs money

When develop IFRS standards

IASB will assess whether

COSTS & BENEFITS ANALYSIS Benefit > Costs