Understandability: Difference between revisions

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imported>Doug Williamson
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imported>Doug Williamson
(Update first definition.)
 
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1.  ''Financial reporting - conceptual framework - qualitative characteristics.''
1.  ''Financial reporting - conceptual framework - qualitative characteristics.''


In financial reporting, understandability is one of the "enhancing" qualitative characteristics, considered to further improve the usefulness of financial information that has already achieved both of the fundamental qualitative characteristics of being ''relevant'' and ''faithfully represented.''
In financial reporting under the conceptual framework, understandability is considered to be one of the "enhancing" qualitative characteristics, that further improves the usefulness of financial information that has already achieved both of the fundamental qualitative characteristics of being ''relevant'' and ''faithfully represented.''





Latest revision as of 15:48, 4 March 2022

1. Financial reporting - conceptual framework - qualitative characteristics.

In financial reporting under the conceptual framework, understandability is considered to be one of the "enhancing" qualitative characteristics, that further improves the usefulness of financial information that has already achieved both of the fundamental qualitative characteristics of being relevant and faithfully represented.


Reasonably informed & diligent users
"Classifying, characterising and presenting information clearly and concisely makes it understandable.
While some phenomena are inherently complex and cannot be made easy to understand, to exclude such information would make financial reports incomplete and potentially misleading.
Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyse the information with diligence."
Conceptual framework for financial reporting - IASB.


2. Financial markets - other contexts.

Similar characteristics of information in financial markets more broadly, and in other contexts.


See also


External links