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ACCA Applied Knowledge · Financial Accounting · Qualitative characteristics of useful financial information

Under the IFRS Conceptual Framework, which pair correctly identifies the two fundamental qualitative characteristics of useful financial information?

Relevance and faithful representation are the two fundamental qualitative characteristics in the IFRS Conceptual Framework. Information must be relevant to users' decisions and must faithfully represent the economic phenomena it purports to show. The other characteristics, such as comparability and timeliness, only enhance usefulness.

  1. ARelevance and faithful representationCorrect
  2. BComparability and verifiability
  3. CTimeliness and understandability
  4. DMateriality and prudence

Explanation

The Conceptual Framework names relevance and faithful representation as the fundamental characteristics. Comparability, verifiability, timeliness and understandability are enhancing characteristics. Materiality is an entity-specific aspect of relevance, and prudence is not a separate characteristic.

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