What are the fundamental characteristics of Corporate Financial Reporting ?

Characteristics of Corporate Financial Reporting Relevance: Information is relevant when it influences the economic decisions of users by helping them to evaluate past, present, and future events to confirm/correct their past evaluations. The relevance of information is affected by its nature and materiality (which is always the threshold for relevance). Information overload, on the other hand, can obfuscate information, making it hard to shift through the relevant nuggets and making interpretation difficult. Reliability: Information should be free from material errors and bias. The key aspects of reliability are faithful representation, priority of substance over form, neutrality, prudence, and completeness. Comparability: Information should be presented in a consistent manner over time and a consistency is maintained between entities to enable users to make significant comparisons. Understandability: Information should be readily understandable by users who are expected to have a reasonable knowledge of business, economies and accounting and a willingness to study the information with reasonable diligence. The process of producing useful information includes a number of decision points, which may constrain the amount of information provided. These include: Timeliness: A delay in reporting may improve reliability at the cost of relevance. Benefit v. Cost: Benefits derived from information should normally exceed the cost of providing it. Balancing of Qualitative Characteristics: To meet the objectives of financial statements and make them adequate for a particular environment, providers of information must achieve an appropriate balance among qualitative characteristics. The aim is to achieve a balance among characteristics in order to meet the objectives of financial statements.