AASB Conceptual Framework for Financial Reporting (May 2019)
Chapter 2: Qualitative characteristics of useful financial information – AASB Conceptual Framework for Financial Reporting (May 2019)

AASB Conceptual Framework for Financial Reporting (May 2019) 2.12: Fundamental qualitative characteristics: faithful representation

What does 2.12 require?

To be useful, information must depict the economic substance of what it describes, not just the legal form. A perfectly faithful representation is complete (all the information needed to understand the phenomenon, including descriptions and explanations), neutral (without slant, weighting, emphasis or manipulation, supported by the exercise of prudence, which is caution under uncertainty that does not permit deliberate overstatement or understatement) and free from error (the description and the process contain no mistakes or gaps, which does not demand perfectly accurate estimates). Where measurement uncertainty is high, a less uncertain but less relevant measure may be preferable; the most useful information is relevant and faithfully represented.

Maintained by Gerard Blokdyk

Other controls in Chapter 2: Qualitative characteristics of useful financial information – AASB Conceptual Framework for Financial Reporting (May 2019)

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