Conversely, financial reporting should not exclude relevant information merely because it is difficult for some to understand or because some investors or creditors choose not to use it. The appropriate way to treat uncertainty is to disclose its nature and extent honestly, so that those who receive the information may form their own opinions of the probable outcome of the events reported. On the other hand, whether the office floor is carpeted and whether the cafeteria food is of good quality are relevant, but probably not material, to a decision to accept the job. It is primarily a means of attempting to cope with measurement problems stemming from the uncertainty that surrounds accounting measures and is more successful in coping with some measurement problems than others.” … A measure with a high degree of verifiability is not necessarily relevant to the decision for which it is intended to be useful.” [Concepts Statement 2, paragraph 89]. Cost-benefit decisions about accounting standards generally have to be made by the standards-setting body—now the FASB. Statements about relevance of financial statement information must answer the question “relevant to whom for what purpose?”. That may make the new information less useful, but it does not make it less relevant to the situation. The exhibit shows two constraints, primarily quantitative rather than qualitative in nature. Since the benefit of the information is representational and not aesthetic, to take “artistic license” with the data decreases rather than increases its benefit. … [Concepts Statement 2, paragraph 87]. Materiality judgments pose the question: “Is this item large enough for users of the information to be influenced by it?” (Concepts Statement 2, paragraph 123). Since understating assets was thought to provide a greater margin of safety as security for loans and other debts, deliberate understatement was considered a virtue. The pervasive constraint is that the benefits of information should exceed its cost. Solomons says that neutrality “does not imply that no one gets hurt”. Striving for representational faithfulness does not comprehend creating an exact replica of the activities of an enterprise. Only actual differences in transactions and other events and circumstances warrant different accounting. Information that adds to uncertainty is inimical to informed and rational decision making and betrays the fulfillment of the objectives of financial reporting. The hierarchy of qualities decomposes reliability into two components, representational faithfulness and verifiability, with neutrality shown to interact with them: (a) Representational Faithfulness – Representational faithfulness is “correspondence or agreement between a measure or description and the phenomenon it purports to represent. Investors and creditors can no longer be expected to tolerate blanket claims of differences in circumstances to justify undue use of alternative accounting procedures. The traditional application of conservatism introduced into reporting a preference “that possible errors in measurement be in the direction of understatement rather than overstatement of net income and net assets” (APB Statement 4, paragraph 171). There is still room for individual judgment in at least one direction. While those concepts are more concrete than usefulness, they are still quite abstract. The hierarchy distinguishes between user-specific and decision-specific qualities because whether a piece of information is useful to a particular decision by a particular decision maker depends in part on the decision maker. Neutrality requires that information should be free from bias toward a predetermined result, but that is not to say that standards setters or those who provide information according to promulgated standards should not have a purpose in mind for financial reporting. “For book values there is disagreement about the formal system (LIFO or FIFO the relevant inputs (which costs are to be attached [to inventory] and which are to be expensed). Popular usage of “material” often makes it a synonym for “relevant,” but the two are not synonymous in Concepts Statement 2. As alluded to earlier, prior knowledge of information may diminish its value but not its relevance and, hence, its usefulness, for it is information’s ability to “make a difference” that makes it relevant to a decision. Accounting, 14th ed., Wiley, 2012, pg relevant, information also must be timely particular individual it. 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