Concept No. 5 identifies a number of characteristics that a statement of accounting must have inclusive of: i. Definition- where the items must meet the definition of an element of financial statements. ii. Measurability- the items must have a relevant attribute measurable with sufficient reliability. iii. Relevance- the information concerning these items must be capable of impacting the users during decision making. iv. Reliability- this characteristic requires that information withheld in these items should be verifiable, neutral as well faithful.
Work Step by Step
Its much imperative to note that; these qualitative characteristics of items to qualify to be statements of financial accounting are crucial since they are highly used by users to make effective and reasonable decisions.