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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Identify the enhancing characteristics of useful accounting information. Why is each one important, and how do they enhance information usefulness?

To determine

Identify the enhancing characteristics of useful accounting information; Specify the reason each one is important and also indicate the manner by which information usefulness can be enhanced.

Explanation

Financial accounting standards board (FASB):

This is the organization which creates, develops, and approves accounting standards; and administrates GAAP.

International Accounting Standards Board (IASB):

IASB is the board which frames, develops, approves, and governs the set of international accounting standards at global level.

  • • The four characteristics that helps in  improving  the usefulness of the accounting information for  decision purpose are given below:
    1. Comparability
    2. Verifiability
    3. Timeliness
    4. Understandability
    • Accounting information of a company should be comparable with the similar information of another company. The comparability of the accounting information enables the information to identify and explain the similarities and the difference between two or more economic facts...

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