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) 2.23: Enhancing qualitative characteristics and the cost constraint

What does 2.23 require?

Comparability, verifiability, timeliness and understandability enhance the usefulness of information that is relevant and faithfully represented. Comparability (like things look alike, different things look different; consistency is a means to it) lets users identify similarities and differences across periods and entities. Verifiability means knowledgeable independent observers could reach consensus that a depiction is a faithful representation, directly or indirectly. Timeliness means information is available in time to influence decisions. Understandability means clear and concise classification, characterisation and presentation for users with reasonable business knowledge who review the information diligently; complex information is not excluded merely because it is hard to understand. The enhancing characteristics are applied in an iterative process and cost is a pervasive constraint: the benefit of reporting an item must outweigh what it costs to produce and to use.

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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