§ |
Primarily financial in nature--generally
quantified and expressed in units of money
|
§ |
**Important**
The information provided
by financial reporting pertains to individual business enterprises, (which may
comprise two or more affiliated entities), rather
than to industries or an economy as a whole or to
members of society as consumers.
"Financial reporting may provide
information about industries and economies
in which an enterprise operates but usually
only to the extent the information is
relevant to understanding the
enterprise.
|
|
§ |
Often results from approximate rather than exact
measures
"The measures
commonly involve numerous estimates,
classifications, summarizations, judgments,
and allocations. The outcome of economic
activity in a dynamic economy is uncertain
and results from combinations of many
factors. Thus, despite the aura of precision
that may seem to surround financial
reporting in general and financial
statements in particular, with few
exceptions the measures are approximations,
which may be based on rules and conventions,
rather than exact amounts."
|
|
§ |
Largely historical in nature; reflects the
financial effects of transactions and events that have
already happened
|
§ |
Financial reporting is but one source of
information needed by those making economic decisions
|
§ |
Information provided involves a cost to provide
and use. Benefits of information provided should
be at least equal to the cost involved to produce.
|