ACCA Applied Knowledge · Financial Accounting · The context and purpose of financial statements for external reporting
Under the IFRS Conceptual Framework, which of the following is a fundamental qualitative characteristic of useful financial information?
Faithful representation is a fundamental qualitative characteristic, alongside relevance. Comparability, verifiability, timeliness and understandability are enhancing characteristics that improve the usefulness of information that is already relevant and faithfully represented, so they are not fundamental.
- AFaithful representationCorrect
- BComparability
- CTimeliness
- DUnderstandability
Explanation
The two fundamental qualitative characteristics are relevance and faithful representation. Comparability, verifiability, timeliness and understandability are enhancing characteristics, so they are not fundamental.
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