i) Relevance:
This is defined as capable of making a difference in the decisions made by users. Financial information is capable of making a difference in decisions if it has predictive value, confirmatory value, or both. Predictive value consists of the capability of being used as an input in processes or models used to predict future outcomes. Confirmatory value exists when the information provides feedback about earlier estimations. The relevance of information depends on its materiality since only material information is considered relevant.

ii) Understandability:
An essential quality of the information provided in financial reports is that it is readily understandable by users. For this purpose, users are assumed to have a reasonable knowledge of business and economic activities and accounting. Classifying, characterizing, and presenting information clearly and concisely makes it understandable.

iii) Materiality:
Information is material if omitting or misstating it could influence decisions that users make on the basis of financial information about a specific reporting entity. Materiality is an entity-specific aspect of relevance based on the nature or magnitude (or both) of the items to which the information relates in the context of an individual entity’s financial report. For example, a large supermarket omitting expenses of GHȼ1,500 would not be material to them but would be to a small local shop.

iv) Completeness:
Completeness means that the depiction will include all the information, including descriptions and explanations, necessary for a user to understand the phenomenon. Omission of any information can lead to unreliability. Therefore, the more complete the information the better, but weigh against the costs of time and money needed to prepare full information. For example, if the omission of a particular asset would lead to incomplete and therefore unreliable information, the effect of having unreliable information must be weighed against the costs and time involved in the inclusion of the asset.

v) Neutrality:
Neutrality is obtained when a depiction is without bias in the selection or presentation of financial information. In other words, it is not manipulated in order to present a favorable or unfavorable depiction of an economic phenomenon. Financial statements are not neutral if a particular selection or presentation of information influences the user’s decision. Competent individuals working independently should arrive at the same or very similar measures of given economic events or situations. For example, a provision for bad debts must be based on some evidence and not the biased view of the preparer of the financial statements.