{"id":63,"date":"2021-02-27T06:11:57","date_gmt":"2021-02-27T06:11:57","guid":{"rendered":"https:\/\/bcisnotes.com\/fourthsemester\/?p=63"},"modified":"2021-02-27T06:11:57","modified_gmt":"2021-02-27T06:11:57","slug":"qualitative-characteristics-of-accounting-information-the-conceptual-foundation-of-accounting-bcis-notes","status":"publish","type":"post","link":"https:\/\/bcisnotes.com\/fourthsemester\/qualitative-characteristics-of-accounting-information-the-conceptual-foundation-of-accounting-bcis-notes\/","title":{"rendered":"Qualitative Characteristics of accounting information || The Conceptual Foundation of Accounting || Bcis Notes"},"content":{"rendered":"

Qualitative Characteristics of accounting information<\/h2>\n

Following are the points regarding the qualitative characteristics of accounting information.<\/p>\n

    \n
  1. Understandability<\/li>\n
  2. Relevance<\/li>\n
  3. Reliability<\/li>\n
  4. Comparability<\/li>\n
  5. Consistency<\/li>\n
  6. Materiality<\/li>\n
  7. Conservation<\/li>\n
  8. Cost-Benefit Relationship<\/li>\n<\/ol>\n

    \u00a0Understandability<\/h3>\n

    For anything to be useful, it must be understandable. Usefulness and understandability go hand in hand. However, the understandability of financial information varies considerably, depending on the background of the user. The financial information should be comprehensible to those who are willing to spend time to understand it.<\/p>\n

    Relevance<\/h3>\n

    To be relevant to investors, creditors, and others for investment, credit, and similar decisions, accounting information must be capable of making a difference in a decision. Relevant information should have the following values.<\/p>\n

    Reliability<\/h3>\n

    Accounting information is reliable to the extent that users can depend on it to represent the economic conditions or events that it purports to represent. Reliability has three basic characteristics:<\/p>\n