brifily explain the any three qualitative characterties of the accounting information?
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Answer:
Qualitative characteristics of accounting information that impact how useful the information is:
Verifiability
Timeliness
Understandability
Verifiability
Verifiability is the extent to which information is reproducible given the same data and assumptions. For example, if a company owns equipment worth 1,000 rupees and told an accountant the purchase cost, salvage value, depreciation method, and useful life, the accountant should be able to reproduce the same result. If they cannot, the information is considered not verifiable.
Timeliness
Timeliness is how quickly information is available to users of accounting information. The less timely (thus resulting in older information), the less useful information is for decision-making. Timeliness matters for accounting information because it competes with other information. For example, if a company issues its financial statements a year after its accounting period, users of financial statements would find it difficult to determine how well the company is doing in the present.
Understandability
Understandability is the degree to which information is easily understood. In today’s society, corporate annual reports are in excess of 100 pages, with significant qualitative information. Information that is understandable to the average user of financial statements is highly desirable. It is common for poorly performing companies to use a lot of jargon and difficult phrasing in its annual report in an attempt to disguise the underperformance.