Under the IFRS Conceptual Framework, what general information is useful for the decision making needs of lenders and investors?
A)Information prepared on the cash basis of accounting.
B)Information and changes in information relating to the entity's resources and claims against those resources.
C)Financial performance resulting from a company's operating activities.
D)Information on the company's equity and share structure.

Question

Quizplus · Accepted Answer

According to the IFRS Conceptual Framework, information and changes in information relating to the entity's resources (assets) and claims against those resources (liabilities and equity) are useful for the decision making needs of lenders and investors. Information prepared on the cash basis of accounting is not relevant in the framework because it does not provide a complete picture of the financial position and performance of the entity. Financial performance resulting from a company's operating activities and information on the company's equity and share structure are important pieces of information, but they are not as general as the information relating to resources and claims against those resources.

Under the IFRS Conceptual Framework, What General Information Is Useful