【正文】 of proceeds received in exchange for the obligation, or in some circumstances (for example, ine taxes), at the amounts of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business. ? proceeds: (of sth/from sth) money gained by selling sth, giving a performance etc, profits Historical cost explained ? The measurement basis most monly adopted by entities in preparing their financial statements is historical cost. This is usually bined with other measurement bases. ? For example, inventories are usually carried at the lower of cost and realisable value, marketable securities may be carried at market value and pension liabilities are carried at their present value. Complete set of financial statements ? A plete set of financial statements prises: ? (a) a statement of financial position as at the end of the period。 solvent ? liquidity: the state of owning things of value that can easily be changed into cash ? solvent: having enough money to pay one’s debts. ? a solvent pany ? financing: 籌資 ? financial performance 財(cái)務(wù)結(jié)果（業(yè)績(jī)） ? to make efficient and effective use of the reporting entity’s resources. 高效率地并富有成效地使用報(bào)告主體的資源 Economic resources and claims ? Information about the nature and amounts of a reporting entity’s economic resources and claims can help users to identify the reporting entity’s financial strengths and weaknesses. ? That information can help users to assess the reporting entity’s liquidity and solvency, its needs for additional financing and how successful it is likely to be in obtaining that financing. ? Information about priorities and payment requirements of existing claims helps users to predict how future cash flows will be distributed among those with a claim against the reporting entity. Changes in economic resources and claims ? Changes in a reporting entity’s economic resources and claims result from that entity’s financial performance and from other events or transactions such as issuing debt or equity instruments. ? To properly assess the prospects for future cash flows from the reporting entity, users need to be able to distinguish between both of these changes. Ine Statement Information Explained ? Information about a reporting entity’s financial performance helps users to understand the return that the entity has produced on its economic resources. ? Information about the return the entity has produced provides an indication of how well management has discharged its responsibilities to make efficient and effective use of the reporting entity’s resources. ? Information about the variability and ponents of that return is also important, especially in assessing the uncertainty of future cash flows. The Contents of Financial Reporting ? Financial reports provide information about ? the reporting entity’s economic resources, ? claims against the reporting entity ? and ? the effects of transactions and other events and conditions that change those resources and claims. ? Some financial reports also include explanatory material about management’s expectations and strategies for the reporting entity, and other types of forwardlooking information. CHAPTER 3: QUALITATIVE CHARACTERISTICS OF USEFUL FINANCIAL INFORMATION ? CHAPTER 2: THE REPORTING ENTITY ? [to be added] ? Fundamental qualitative characteristics ? Relevance 相關(guān)性 ? Materiality 重要性 ? Faithful representation 真實(shí)反映 ? Enhancing qualitative characteristics ? Comparability 可比性 ? Verifiability 可驗(yàn)證性 ? Timeliness 及時(shí)性 ? Understandability 可理解性 The qualitative characteristics is directed at the usefulness of financial information ? The qualitative characteristics of useful financial information discussed in this chapter identify the types of information that are likely to be most useful to the existing and potential investors, lenders and other creditors for making decisions about the reporting entity on the basis of information in its financial report (financial information). Fundamental qualitative characteristics ? The fundamental qualitative characteristics are ? relevance（相關(guān)性） ? and ? faithful representation（真實(shí)反映） ? Relevance ? Relevant financial information is capable of making a difference in the decisions made by users. ? Information may be capable of making a difference in a decision even if some users choose not to take advantage of it or are already aware of it from other sources. ? Financial information is capable of making a difference in decisions if it has predictive value, confirmatory value or both. Faithful representation ? Faithful representation ? Financial reports represent economic phenomena in words and numbers. To be useful, financial information must not only represent relevant phenomena, but it must also faithfully represent the phenomena that it purports to represent. ? To be a perfectly faithful representation, a depiction would have three characteristics. It would be ? plete（完整） ? neutral （中立） ? and ? free from error（無(wú)差錯(cuò)） Faithful representation explained ? Faithful representation does not mean accurate in all respects. Free from error means there are no errors or omissions in the description of the phenomenon, and the process used to produce the reported information has been selected and applied with no errors in the process. In this context, free from error does not mean perfectly accurate in all respects. Materiality（重要性） ? Information is material if omitting it or misstating it could influence decisions that users make on the basis of financial information about a specific reporting entity. ? In other words, materiality is