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CFAS - Chapter 3: Identification

This document discusses key concepts for the identification of financial information including: comparability which allows comparison of points of likeness and difference; completeness which means all necessary information is provided to avoid misinterpretation; conservatism which means recognizing all losses and not gains when uncertain; and materiality which means small unimportant items can be expensed rather than capitalized. Other concepts covered are relevance which means information must be capable of influencing decisions, substance over form which means economic realities take priority over legal technicalities, and verifiability which implies a consensus can be reached on the accuracy of the information.

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500 views1 page

CFAS - Chapter 3: Identification

This document discusses key concepts for the identification of financial information including: comparability which allows comparison of points of likeness and difference; completeness which means all necessary information is provided to avoid misinterpretation; conservatism which means recognizing all losses and not gains when uncertain; and materiality which means small unimportant items can be expensed rather than capitalized. Other concepts covered are relevance which means information must be capable of influencing decisions, substance over form which means economic realities take priority over legal technicalities, and verifiability which implies a consensus can be reached on the accuracy of the information.

Uploaded by

agm25
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CFAS - Chapter 3: Identification

Study online at quizlet.com/_71w8ux

1. Comparability It is a ability to bring together for the purpose of noting points of likeness and difference
2. Comparability It is the goal achieved by consistency
3. Completeness The informational should be presented in a manner that facilitated understanding and avoids erroneous
implication
4. Completeness The financial statements shall be accompanied by notes to financial statements
5. Conservatism When in doubt, recognize all losses and don't recognize gains
6. Faithful The description and numbers or figures must match what really existed or happened
Representation
7. free from error There are no errors or omissions in the description of the phenomenon
8. Materiality Small expenditures for tools are expensed immediately
9. Neutrality Preparers of statements should not try to increase the usefulness of the information to a few users to the
detriment of other who may have opposing interests
10. Relevance Information that has no bearing on an economic decision to be made is useless
11. Relevance It is the capacity of the information to influence a decision
12. Substance over In case of conflict between economic substance and legal form of a transaction, the economic substance shall
form prevail
13. Timeliness The older the information, the less useful
14. Understandability It requires that users have some knowledge of the complex economic activities of entities, the accounting
process and the technical terminology in the statements
15. Verifiability This enhancing qualitative characteristic implies consensus

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