Intermediate Accounting I | Adam Bross | Exam 1 Study Guide | EX 2-4

Verifiability

Different knowledgeable and independent observers can reach consensus that a particular representation is faithful.

Timeliness

Making information available to decision-makers before it loses its capacity to influence decisions

Relavance

Capacity to make a difference in a decision, enabling users to predict future outcomes and/or confirm prior expectations

Decision usefulness

Overall objective of financial information

Neutrality

Absence of bias intended to influence financial statement users' behavior in a particular direction

Free from error

Presented as accurately as possible, using a process that reflects the best available inputs

Predictive Value

Helps decision makers form expectations about the future

Completeness

Full disclosure of all the information necessary to understand the information being reported

Comparability

Enables users to identify and explain similarities and differences between two or more sets of economic facts

Materiality

The nature and magnitude of an omission or misstatement that would influence the judgment of reasonable users of that information

Consistency

Accounting methods and procedures applied in the same manner from period to period

Confirmatory value

Helps decision makers confirm or correct prior predictions or expectations

Faithful representation

When the words and amounts accurately depict the economic substance of what they purport to depict

Understandability

Comprehensible to users