Chapter 6, Problem 1LO

To determine

The characteristics of relevant information.

Explanation of Solution

Relevant information: Relevant information is considered as information that can be functional to resolve an issue. This is a specific issue while deciding the configuration and substance of financial statement of an entity, since the best possible design and dimension of detail of data can alter the conclusions of clients with respect to the future bearing of a business.

The characteristics of relevant information are as follows:

• It identifies that significant and relevant information or data that varies for at least one of the substitutes being deliberated.
• It influences the future.

Conclusion

It is intriguing to take note of these characteristics, which have only unique perspectives of a similar idea due to the reason that the historical information does not contrast between the choices. Additionally, it can be stated that historical expenses are not applicable on the grounds that they don't vary between choices related with present choices.