Analysis of some qualitative

characteristics of a listed
financial statements

What is a listed financial

statement?!?
Define of listed company: Firm whosesharesarelisted
(quoted) on astock exchangefor publictrading. Also
calledquoted company.
=> listed financial statement is from listed company!

Definition of financial statement

Records that outline the financial activities of a
business, an individual or any other entity. Financial
statements are meant to present the financial
information of the entity in question as clearly and
concisely as possible for both the entity and for readers.

Qualitative characteristics of
financial statement
There are two types of qualitative characteristics:
fundamental (primary) which are:
Relevance and faithful representation are the fundamental
qualitative characteristics of useful financial information.

Advance (supporting) including:

Comparability, timeliness, verifiability and inteligibility

Fundamental qualitative
characteristic:
Relevance:
-Requires financial information to be relevant to the
decision making needs of the users.
Financial statement is capable of:
Confirm role
Predict role
Essential for decision making

Fundamental qualitative
characteristic:
Faithful presentation:
- requires the financial information to be true and fair and
free from misstatement.
Information of financial statement should be:
Neutral
Complete
Without material mistakes

Advance qualitative characteristic

Comparability:
Information about a reporting entity is more useful if it can be
compared with a similar information about other entities and
with similar information about the same entity for another
period or another date. Comparability enables users to identify
and understand similarities in, and differences among, items.

Advance qualitative characteristic

Timeliness:
Timeliness means that information is available to decisionmakers in time to be capable of influencing their decisions.

Advance qualitative characteristic

Verifiability:
Verifiability helps to assure users that information represents
faithfully the economic phenomena it purports to represent.
Verifiability means that different knowledgeable and
independent observers could reach consensus, although not
necessarily complete agreement, that a particular depiction is
a faithful representation.

Advance qualitative characteristic

Intelligibility:
Classifying, characterising and presenting information clearly
and concisely makes it understandable. While some
phenomena are inherently complex and cannot be made easy
to understand, to exclude such information would make
financial reports incomplete and potentially misleading.
Financial reports are prepared for users who have a
reasonable knowledge of business and economic activities and
who review and analyse the information with diligence.