← Accounting concepts for a New Zealand reporting entity
Qualitative characteristics, tied to the user (every paper)
Never define a characteristic and leave it. Say what it lets THIS user do.| Characteristic | What it means | What it does for the user |
|---|---|---|
| Relevance | Capable of changing a decision | Petra can judge whether to hold or sell |
| Faithful representation | Complete, neutral, free from error | The figures depict what actually happened |
| Comparability | Like-for-like across years and entities | This year can be set against last, and against rivals |
| Verifiability | Independent observers reach the same result | The audited numbers can be trusted |
| Timeliness | Available soon enough to act on | Old information cannot inform today's decision |
| Understandability | Clear, classified, no needless complexity | A non-accountant user can read it |
Materiality sits INSIDE relevance and is entity-specific. Saying "materiality is a qualitative characteristic in its own right" loses the mark.