The Qualitative Characteristics of Relevance and Reliability

The Qualitative Characteristics of Relevance and Reliability Essay example
Masters
Essay
Finance & Accounting
Pages 14 (3514 words)
Download 0
Relevance and Reliability Your Name Due Date List of Contents Introduction………………………………………………………3 Theory…………………………………………………………….4 Practice……………………………………………………………8 The Application of Theory to Practice…………………………….11 Recommendations………………………………………………14 References……………………………………………………….17 Introduction Financial reporting is a legal requirement of a company…

Introduction

IASB has set standards for financial reporting which ensure that the reporting is done according to the set principles by all the companies. This helps the users of financial statements in making crucial economic decisions as there is no ambiguity due to different accounting styles. The standards ensure that a company provides all the relevant information that influences the financial needs of the users. There are specific areas that are not allowed to be left untouched. There is a possibility that some users require non-financial information about a company which is not available in its financial statements. There are a variety of users and their requirements are also different. Financial statements may be used by the employees of a company to know about their chances of obtaining a bonus. A cash flow statement of the year describes the liquidity of the company. Comparisons of statements of affairs of a year with those of preceding years help in evaluating the performance of the company. ...
Download paper
Not exactly what you need?

Related papers

Relevance and Reliability
The performance and competence of the management can also be judged to a great degree. Financial reporting that is done according to the standards defined by the IASB ensures that a very helpful analysis is available to compare a company’s performance with its own history and with the other companies. This helps a myriad of users in making crucial economic decisions. Financial statements are…
Finance and Accounting
Materiality is one of the qualitative characteristics. Prudence is another qualitative characteristic. Relevance is an important qualitative characteristic. Reliability is a necessary qualitative characteristicii. The users of the financial information rely on the qualitative characteristics of the financial statements for their decision making activitiesiii. The creditors use the financial…
Contribution of relevance and reliability on financial reporting.
Main objective of accounting policy is to produce fair valued accounting information that is highly reliable and relevant to the purpose and objectives of financials statement. Financial statements are the most important components of annual report that all public limited companies publish each year for the stakeholders of the company. The financial statements need to be the fair and ethical…
Finance Assessed Coursework
ct with each other and how the reporters of financial information struggle to strike a balance among these attributes to ensure the usefulness of information for the user. According to the U.S. GAAP Codification of Accounting Standards, financial statements of an enterprise comprise of profit/loss statements, balance sheets, statement of cash flows and an account of stockholders' equity. These…
Qualitative Characteristics of Financial Information
The information is not just useful for the capital providers but also to the other user groups such as government, regulatory bodies etc. The next level of conceptual framework is the fundamental concepts i.e. qualitative characteristics of financial information and elements of financial statements. The third level is the implementation level, which contains recognition, disclosure and measurement…
Financial Accounting. Relevance and Reliability.
Financial information of any company is presented in financial statements. Financial statements are the main components of company’s annual report. These statements need to have fairly representation of the financial details which is responsible for the decision making process of the investors, suppliers, creditors etc. relevance and reliability are two most important characteristics of…
Judgement in Accounting
Secondly, accounting follows a framework popularly known as “The Conceptual Framework for Financial Reporting”. In addition, the overall accounting structure and basic formation of reporting, assists in conceptualizing accounting better. The knowledge of accounting principles, procedures, and rules is valuable to business and its eventual success in any given financial period. Financial…