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What is an Economic Event?

An economic event is any change in value of an economic resource or the transfer of control of such a respurce from one party to another.

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What is Accounting?

Accounting refers to the process of classifying, interpreting, summarising and reporting on transactions and other economic event. 

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What Accountants do

Accountants prepare reports for a range if decision makers and stakeholders.

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4 characteristics which makes information useful

4 Characteristics that make information useful:

  • Relevance- info is relevant if it helps makes decisions
  • Reliability- info is reliableif its free of error and bias
  • Comparability- info must be comparable with similar info from other organisations
  • Understandability- info should be expressed clearly and in a form that users can understand
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The International Accounting Standards Board (IASB) is an independent, private sector body that develops and approves International Financial Reporting Standards (IFRSs). IFRSs are the rules that govern modern accoynting. 

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ISAB's fundemental characteristics

ISAB identifies 2 fundemental characteristics that underlie useful info:

  • Relevance- defined as having 'predictive or confirmary value'
  • Faithful Representative- defined as 'complete, neutral and free from error'
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3 further qualities of useful info

Further 3 qualities that also underlie useful info:

  • The cost of any ingo does not exceed the benefit
  • Info should be easy to use and understand
  • Any info meets user needs
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