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Comparability, Reliability, cosistency.
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The qualitative charcteristics of useful financial reporting identify the types of information are likely to be most useful to users in making decisions about the reporting entity on the basis of information in its financial report. The financial information is useful when it is relevant and represents faithfully what it purports to represent. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable.
Useful financial information should provide the users both internal and external a guidance on how to allocate scarce resources efficiently, so it should contain, just to name some as consistency, reliability, comparability, comprehensibility and other characteristics.
The "Objective and Qualitative Characteristics" phase is part of the Conceptual Framework project.
The Conceptual Framework sets out the concepts that underlie the preparation and presentation of financial statements. It is a practical tool that assists the IASB when developing and revising IFRSs. The objective of the Conceptual Framework project is to improve financial reporting by providing the IASB with a complete and updated set of concepts to use when it develops or revises standards.
Qualitative characteristics of useful financial information/reporting identify the types of information are likely to be most useful to users in making decision about the reporting entity on the basis of information in its financial reports. The characteristics are:
i- Fundamental Characteristics
a- Relevance
b- Faithful Representation
ii- Enhancing Qualitative Characteristics
a- Comparability
b- Varifiability
c- Timeliness
d- Understandability
The above four (Ccomarability, varifiability, timeliness and understandability enhance the usefulness of information that is relevant and faithfully represented.
