Page 11 - Finac1 Test 1 slides - 2. The Conceptual Framwork
P. 11
THE CONCEPTUAL FRAMEWORK
Elements of the financial statements
Fundamental Characteristics:
1. Relevance
• Capable of making a difference to decisions - Predictive
and / or confirmatory i.e. evaluation past, present or
further evaluations.
• Materiality
• Omitting or misstating could influence decisions
• Entity specific
• Material by nature and magnitude
11