Characteristics of Useful Information

The Conceptual Framework for Financial Reporting jointly issued by the IASB and FASB defines the relevance and faithful representation as the primary characteristics of useful information. In providing information, the cost benefit analysis is applied as a pervasive constraint.
Components of Relevance
Predictive value and confirmatory value are the components of relevance.
Components of Faithful Representation
Completeness, Neutrality and Free from error are the components of faithful representation.
Characteristics Enhancing the Usefulness of Information
Characteristics that enhance the usefulness of information include comparability, verifiability, timeliness and understandability.

 

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