SFAC no a couple of

 Essay about SFAC no 2

Economical Accounting Specifications Board




Statement of Financial Accounting

Concepts Number 2

Qualitative Characteristics of Accounting Information

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Statement of Financial Accounting Concepts No . 2

Qualitative Characteristics of Accounting Information


Issued: May 1980

Affects: No additional pronouncements

Afflicted with: Paragraph some and footnote 2 replaced by QUE TIENE 6


The purpose of this Assertion is to analyze the characteristics that will make accounting details useful. People who prepare, audit, and employ п¬Ѓnancial information, as well as the Economic Accounting Criteria Board, must often select or evaluate accounting alternatives. The characteristics or perhaps qualities details discussed with this Statement are definitely the ingredients that make information useful and are the qualities to be sought when ever accounting alternatives are made.

Most п¬Ѓnancial confirming is concerned in varying certifications with decision making (though decision makers also use information obtained from other sources). The need for information on which to base purchase, credit, and similar decisions underlies the objectives of п¬Ѓnancial confirming. The effectiveness of information must be evaluated with regards to the functions to be dished up, and the goals of п¬Ѓnancial reporting focus on the use of accounting information in decision making.

The central position assigned to decision making qualified prospects straight to the overriding criterion by which most accounting selections must be judged. The better choice is one which, subject to things to consider of price, produces via among the obtainable alternatives info that is most successful for decision making. Even targets that are focused more to stewardship are worried with decisions. Stewardship handles the effectiveness, effectiveness, and integrity in the steward. To state that stewardship reporting is an aspect of accounting's making decisions role is actually to say that its goal is to guidebook actions which may need to be ingested in relation to the steward or in relation to the activity that is being monitored. A Hierarchy of Accounting Characteristics

The characteristics details that make it an appealing commodity can be viewed as a pecking order of characteristics, with performance for decision making of most importance. Without usefulness, there would be no benefits coming from information to put against the costs. User-Specific Factors

Within the last analysis, each decision machine judges what accounting info is useful, and that judgment is usually influenced by factors such as the decisions to get made, the strategy of making decisions to be employed, the information previously possessed or perhaps obtainable from the other sources, as well as the decision maker's capacity (alone or with professional help) to method the information. The optimal information for starters user will not be optimal another. Consequently, the Board, which will must make an effort to cater to many different users although considering the burdens placed on individuals who have to provide info, constantly treads a fine line among requiring disclosure of an excessive amount of or too little information.



FASB Statement of Concepts

The hierarchy isolates user-specific qualities, for example , understandability, from characteristics inherent in information. Details cannot be useful to decision creators who simply cannot understand this, even though it may possibly otherwise always be relevant to a decision and be trusted. However , understandability of information relates to the characteristics with the decision developer as well as the attributes of the info itself and, therefore , understandability cannot...

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