What is an enhancing quality in the second level of the conceptual framework for financial reporting?

Quality

Relevance

Reliability

Consistency

1 answer

In the second level of the conceptual framework for financial reporting, the enhancing qualitative characteristics include reliability and consistency. Relevance is considered a fundamental qualitative characteristic.

So to clarify:

  • Relevance is a fundamental quality, meaning it must be present for information to be useful.
  • Reliability (often referred to as faithful representation) is an enhancing quality that helps increase the utility of the financial information.
  • Consistency is also an enhancing quality, as it allows for the comparison of financial statements over time.

Therefore, in your options, the enhancing qualities would be Reliability and Consistency.