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probable future economic benefits obtained or controlled by a particular entity as a result of a past transaction.
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| probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of a past transaction. |
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| change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. |
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| difference between the entity's assets and its liabilities. |
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The fundamental qualitative characteristics of useful financial information are
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| relevance and faithful representation |
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Relevant financial information is capable of in the decisions made by users.
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Financial information is capable of making a difference in decisions if it has , or both.
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| predictive value, confirmatory value |
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Financial information has if it can be used as an employed by users to predict . Financial information need not be a prediction or forecast to have .
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predictive value
input to processes
future outcomes
predictive value |
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Financial information has if it provides feedback (confirms or changes) about previous evaluations.
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Information is material if it could could influence decisions that users make on the basis of the information provided.
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To be useful, financial information not only must represent relevant phenomena, but it also must the phenomena that it purports to represent.
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To be a perfectly faithful representation, a depiction would have three characteristics. it would be .
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| complete, neutral, and free from error |
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| A depiction includes all information necessary for a user to understand the phenomenon being depicted, including all necessary descriptions and explanations. |
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A depiction is without bias in the selection or presentation of financial information. The depiction is not , weighted, or otherwise manipulated to increase the probability that financial information will be received favorably or unfavorably by users.
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Faithful representation does not mean in all respects.
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| Free from error means that there are no in the description of the phenomenon, and the process used to produce the reporting information has been with no errors in the process. |
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errors or omissions
selected and applied |
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are qualitative characteristics that enhance the usefulness of information that is relevant and faithfully represented.
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| Comparability, verifiability, timeliness, and understandability |
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| is the qualitative characteristic that enables users to identify and understand similarities in, and differences among, items. |
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refers to the use of the same methods for the same items, either from period to period within a reporting entity (which promotes intrafirm comparability) or in a single period across entities (which promotes inter firm comparability).
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| means that different knowledgeable and independent observers could reach consensus, although not necessarily complete agreement, that a particular depiction is a faithful representation. |
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Verification can be direct or indirect. verification means verifying an amount or other representation through direct observation, for example, by counting cash. verification means checking the inputs to a model, formula, or other technique and recalculating the outputs using the same methodology.
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means having information available to decision makers in time to be cable of influencing their decisions.
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| Classifying, characterizing, and presenting information clearly and concisely contributes to its . |
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Cost is a on the information that can be provided by financial reporting.
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| Providers of financial information expend most of the effort involved in collecting, processing, verifying, and disseminating financial information, but ultimately bear those costs in the form of reduced returns. of financial information also incur costs of analyzing and interpreting the information provided. |
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