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Further details regarding the major categories and specific types of qualitative characteristics
of useful accounting information are given in Table 1.1.
Table 1.1: Qualitative characteristics of useful accounting information

Fundamental qualitative characteristics
Relevance Accounting data should provide relevant information
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to various users for taking appropriate decisions.
Faithful representation Accounting data should be completeness, neutral and
free from error (truthful, accurate and complete).
Enhancing qualitative characteristics
Comparability Accounting information should be able to compare
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similarity and differences between companies in the
same industry or make comparisons of performance
overtime.
Verifiability Accounting information should be verifiable when
they are reproducible, so that given the same data and
assumptions, independent parties should reach at the
same conclusion.
Timelines LANGUAGE EDITING
Accounting information should be available on-time
to users after the events to which they pertain have
occurred.
Understandability Accounting information should be clear and ease in
such a way that it is easily understood by common man
who has a reasonable knowledge of business.
Cost constrains
Cost The best benefits of providing the information should
justify the cost of providing and using the information.

Relevant: accounting information should be its ability to show the attractiveness of each
able to make impact or difference in making project under consideration such as the
economic decisions. Economic decisions differences in revenues to be generated and
involve choosing the best alternatives to cost savings.
utilise resources effectively. For example,
one may have to decide whether to invest Faithful representation: the accounting
in project A or project B by considering information should focus on three attributes as
the potential of each project in generating shown in table 1.1: completeness, neutrality
income. The relevance of accounting and free from material errors.
information will be evaluated by considering

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