 We are still on conceptual framework of accounting and now we are talking about quality characteristics of financial information. Now qualitative characteristics, in fact, two types of quality of information. One is fundamental and the others are enhancing. So they are about six, seven qualities they are mentioned. So one of them is understandability. Users must be able to understand financial statement with some knowledge of business, economics and accounting and a willingness to study the information with reasonable diligence. Here everybody cannot understand what is balance sheet and what is the income statement or what is cash flow statement. Only those who have some knowledge of business and economics and accounting as well because if I say somebody assets they may not understand what they mean by assets. Similarly the other one is relevance. Relevant information which is needed by the users that should be provided relevant to the business, relevant to the particular entity. Information has the quality of relevance when it influences the economic decision of user by helping them evaluate past, present or future events or conforming or correcting the past valuation. This is another very, very important characteristics that the information should be relevant to the current period or maybe in the subsequent period it should be relevant. Then the timeliness. There must always be a time frame when is it for a month or is it for a quarter or is it for a year? It is on a particular date so time should be very, very important that any statement without the time frame is not acceptable because today let's say if I'm preparing accounts for today let's say today is 28th of May and after some time if I want to go back and do if the date is not there then I think it will be difficult for me to understand. So timeliness is important. Then the materiality information is material if its mission or misstatement could influence economic decisions of user taken on the basis of the financial statement. You know small things are there but here it means the material items. For example if look into it now, if you go for a shopping and say if you ask for a change of let's say rupee one so you won't get it because there is no coin available at the moment or if it is available they don't have it at that particular time. So that is not a material. Material means if it affects the decision makers you know if that information is known to the decision maker his decision might change so that is the important thing. The information should be material, comparability, comparison with the past or maybe of some other units. For example comparison can be with let's say last year to this year comparison can be company A company B with the similar industry. So comparability, the ability to identify trends in performance and financial position information must be shown consistently from one period to another period and that accounting policy should be fully disclosed. This is a very important thing that if you feel that the policy you want for example depreciation if you charge depreciation on a straight line basis so onward you should charge on a straight line basis. If let's say this telephone bills if you put it into selling expense so keep on putting on the selling expense it's not possible that you can change it now. If you want to change you should justify. You can only justify then you can change the methods or the concepts you have. Now verifiability is a very important thing. You know at the end of the day auditors come and they ask you provide the information what you prepare and then support it. Documentary evidence is a must and individual can verify it. Now let me tell you all users are not going to ask you to verify the things but at least they depend on the auditors that they have already verified the things which they have reported. Then reliability. Information should be reliable. People can trust. People can depend on those information. They know they are not being cheated about what information they have provided. Comparatability I explained that user must be able to compare the entity financial statement through time to identify trend with the finance statement of other entities to evaluate the relative financial position and performance and change in financial position constraint. That is another important thing. Timely statement to be produced. For example now computer is there so all data is in there and there and then you can press a button and you can get the balance sheet and come to everything. But then why company takes time to produce these statements. Now there are a lot of things in it and we are not going to discuss here anymore but there is a constraint that we are not giving time. We are not supposed to give time to delay the report. There is a law that at least within three months time you should produce your financial report. Why three months time? Why not in one month time? But there is they have given purposefully all this thing. Now timelapse balance between benefits and cost that is also very very important thing. You know we should not keep on piling up information unnecessarily and keeping incurring cost because what we do when we are preparing these statements we are incurring cost as well. We hire people, we have auditors, we have accountants, we have chief managers and so on. So it's costly but must keep in mind that what we are producing it's cost effective and if you feel that if the cost is exceeding then the benefits if you are producing this thing then I think it is not worth you should better stop it. This is between quality-taped characteristics and true and fair value. True and fair view this is an again an audit terms that it's reliable, it's fair people may take it as a granted that it's the correct information. Now correct doesn't mean again that it should be 100% perfect no way it is not possible because all over the world I have seen that things are somehow managed here and there that's why these are many companies are losing business or rather going bankrupt because the information which they disclose in their financial statements is not true. Reliability another important thing the information must be reliable to be useful. The user must be able to depend on it being faithful. Information has the quality of reliability when it is free from material error that is the important thing that there is no material error material I mean there is no big error in it and bias and can be depended upon by the user to to represent faithfully and which is either reports to represent or could reasonably be expected to represent. Now this reliability is also as I said it's very important to be faithful information it should be complete it should be neutral and it should be free from error but perfection is seldom if ever achieved let me tell you we if we expect that everything is okay no it's highly impossible that everything is to be okay we come across things are going here and there and things are wrong also. Substance over form this is again a law rule actually that see the matters legally is legally is not that important we need to see the practice again commercial reality realist rather than its legal form for example if you buy let's say if you get a car on lease so basically lease you are you are using it for all other purposes you are in charge of that car but the owner is you the lesser not you are the owner but practically look you are the owner so you now it's a standard says that if you are taking certain on lease you should keep it in in your books of accounts as your own asset although you're not the owner so substance means the reality behind it that should be important