Page 19 - Finac1 Test 1 slides

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

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