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Conceptual framework (Chapter 2, 3 and 4) - Coggle Diagram

- - - - Confirming value
      - Can influence users' economic decisions:
        -Predictive value - can be used as an input to processes employed by users to predict future outcomes
        -Confirming value - provides feedback about previous evaluations
      - Predictive value
    - - Neutrality (impartial)
      - Freedom from material error - description and process to produce information
      - Completeness (all necessary information)
      - Materiality - Information is material if omitting it or misstating it could influence decisions that users make on the basis of financial information about a specific reporting entity
  - - - Verification can be direct (counting cash) or indirect (checking the input formula and recalculating the outputs)
      - Verifiability helps assure users that information faithfully represents the economic phenomena it shows to represent. It means that different knowledgeable and independent observers could reach consensus
    - - Having information available to decision makers in time to be capable of influencing their decisions
    - - Information is useful if it is comparable with other entities, or similar information of the same entity for another period or another date
      - Don't confuse with uniformity, uniformity helps to achieve comparability
    - - Classifying, characterizing and presenting information clearly and concisely makes it understandable
      - Include inherently complex information, otherwise reports will be incomplete and potentially misleading
      - Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyse the information diligently