Qualitative characteristics of accounting information prove helpful to the user and also help him take various decisions. Following are the qualitative characteristics of accounting information :
1. Understandability : Accounting information should be presented in such a manner that the user can understand it easily. The accounting information should be presented appropriately and accurately. For example, if an entry is recorded for a transaction which is not properly classified or if its language is ambiguous or not clear it would not be possible to understand the accounting statements properly.
2. Relevance : Accounting information should have the quality of relevance. The accounts should be prepared and presented keeping in view of the objectives. In the context of such objectives, the accounts should comprise all necessary information. Accounting statement prepared at the end of accounting period should satisfy the required objective. For example, the person who is giving away loan would require (be interested) to know whether the assets are free of charge ? Whether such assets are recorded at their proper values?
3. Reliability : Accounting information should be authentic and reliable. That is, it should not contain any error or false presentation. While writing the accounts the biased view should not be adopted and such accounts should be presented in a neutral manner.
4. Comparability : The quality of comparability needs to be followed while writing the accounts. Hence accounting information of a firm should be comparable for different years. Likewise accounting information of various firms should be comparable for any particular year. Therefore, the accounting statements of any company shows the figures of previous year as well as for current year. Accounts should be written as per those accounting principles which are generally accepted by all.
