{"id":367,"date":"2025-06-17T10:51:49","date_gmt":"2025-06-17T09:51:49","guid":{"rendered":"https:\/\/www.thetrainingplace.org\/blog\/?p=367"},"modified":"2025-06-27T10:30:33","modified_gmt":"2025-06-27T09:30:33","slug":"frs18","status":"publish","type":"post","link":"https:\/\/www.thetrainingplace.org\/blog\/2025\/06\/frs18\/","title":{"rendered":"FRS 18"},"content":{"rendered":"\n

FRS 18 sets out two main qualitative characteristics (relevance & reliability) and four
enhancing qualitative characteristics that information in the financial statements should
possess in order for the content of the financial statements to be useful to its users.
When an accounting policy is to be selected, its appropriateness to the business
should also be considered against these qualities. These are relevance, reliability,
comparability, understandability, verifiability and timeliness.
<\/p>\n\n\n\n

Relevance<\/strong>
Financial information must be relevant to the decision making process and should
have the ability to influence the economic decision of the users by helping them
evaluate past, present and future events. In making choices, businesses should select
accounting policies or financial information that is useful in assessing stewardship and
in making economic decisions.<\/p>\n\n\n\n

Reliability<\/strong>
Financial information must be reliable in reflecting the substance and economic
reliability of the transactions and other events that occurred and not merely the legal
form of the events-i.e. substance over form. The information must be free from
material error and bias \u2013i.e. neutral- and it must be dependable upon by its users to
represent faithfully what it claims to represent as at the date of the financial
statements. This is also known as faithful representation.
Financial information produced under uncertainty, where decisions have to be made
on estimates e.g. allowance for doubtful debts, must exhibit a level of caution and
prudence in order to be reliable.

Comparability<\/strong>
Financial information must be comparable and consistently applied over time to enable
its users be able to compare similar information on the business for other periods.
Financial statements must include corresponding information for the preceding periods
and any changes in accounting policies used, must be notified to the users of the
financial statements.<\/p>\n\n\n\n


Understandability<\/strong>
Financial information must be understandable by its users who should have a
reasonable knowledge of the business, its economic activities, the financial statements
of the business and a willingness to study the information presented.<\/p>\n\n\n\n


Verifiability<\/strong>
Financial information must be verifiable by its users from the notes to the accounts
and other supporting documents or business documents and the data contained in the
financial statements should be accurate and should be a true representation of the
information contained in the raw data used to prepare the accounts.<\/p>\n\n\n\n


Timeliness<\/strong>
Financial information must be delivered in a timely manner to its users to make it
useful to them in their decision making process.<\/p>\n\n\n\n

AAT Level 3 | The Training Place<\/a><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

FRS 18 sets out two main qualitative characteristics (relevance & reliability) and fourenhancing qualitative characteristics that information in the financial statements shouldpossess in order for the content of the financial statements to be useful to its users.When an accounting policy is to be selected, its appropriateness to the businessshould also be considered against these qualities. … Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,29,22],"tags":[],"class_list":["post-367","post","type-post","status-publish","format-standard","hentry","category-aat","category-financial-accounting-preparing-financial-statements","category-level-3"],"yoast_head":"\nFRS 18 - The Training Place Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thetrainingplace.org\/blog\/2025\/06\/frs18\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FRS 18 - The Training Place Blog\" \/>\n<meta property=\"og:description\" content=\"FRS 18 sets out two main qualitative characteristics (relevance & reliability) and fourenhancing qualitative characteristics that information in the financial statements shouldpossess in order for the content of the financial statements to be useful to its users.When an accounting policy is to be selected, its appropriateness to the businessshould also be considered against these qualities. ... 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