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Qualitative characteristics Accounting concepts


Release on a timely basis

Making a difference

Has predictive value, confirmatory value.


Without bias Information must not be manipulated

Free from error

All information and all explanations

No errors or omissions in the description

Disclosure of accounting policies

Able to distinguish between different accounting policies Able to make valid comparison of similar items

Not the same as uniformity

Entities should change accounting policies if those policies become inappropriate

Corresponding information

Should be shown Enable comparison to be made

Assure users that information faithfully represents the economic phenomena it purports to represent


Can be independently verified more decision-useful

Having information available to decisionmakers in time





What is business?
Business may be defined in various ways. Its purpose is to make a profit.

Business is separate from its owner

For accounting treat business as separate from the owners. The transactions of the owner should not be mixed with the businesss transactions. For example, when a sole trader draws money from the business for personal use.

1person in business (self-employed)

Sole trader

not limited company

owner personally liable of all liabilities of business

two or more people in business


share profit/losses Owners/partners personally liable

Limited Company

business & owners are separate in laws have limited liability. Most owners can lose is amount of their investment in business

are expenses charge against profit relate to a particular accounting period, even though they have not yet been paid they are recorded in the accounting records and reported in the financial statements in computing profit revenue earned must be matched against expenditure incurred in earning it (matching convention)

Financial statements are required to give a fair presentation or present fairly in all material respects the financial results of the entity.
Compliance with IFRSs will almost always achieve this.


Compliance with IFRSs should be disclosed.


All relevant IFRSs must be followed if compliance with IFRSs is disclosed.


Use of an inappropriate accounting treatment cannot be rectified either by disclosure of accounting policies or notes/explanatory material.


Selection and application of accounting policies. Presentation of information in a manner which provides relevant, reliable, comparable and understandable information. Additional disclosures where required.



To maintain consistency, the presentation and classification of items in the financial statements should stay the same from one period to the next, except as follows:

There is a significant change in the nature of the operation or a review of the financial statements indicates a more appropriate presentation. A change in presentation is required by an IFRS.