Introduction:
Financial statements should be more than just numbers—they should provide useful insights for decision-makers. The qualitative characteristics of financial statements are the attributes that make this information helpful.
What Are Qualitative Characteristics?
The qualitative characteristics are the traits that make the information in financial statements useful to users.
The Four Primary Qualitative Characteristics:
- Understandability:
- Give explanation
- Example: Easy to interpret financial information.
- Relevance:
- Financial Information is to determine economy decisions.
- Example of Relevance: Balance Sheet.
- Reliability:
- The information must contain no error.
- Example: The amount is always the same.
- Comparability:
- How one compares all the information.
- Example: All information that is put in the statements should be the same.
Conclusion:
The financial statements that shows how company and money flows work. It is very important to show information clearly and accurately.