The Qualitative Characteristics and Cost Constraint on Useful Financial Information

Abstract

Thai Conceptual Framework for Financial Reporting (Adjusted B.E. 2558),TCF, which has been issued by the Federation Accounting of Professions of Thailand (FAP), has been based on the Conceptual Framework for Financial Reporting (Bound volume 2015 Consolidated without early application) as issued by International Accounting Standards Board. TCF has been issued whileconsidering the Thai business environment. This article presents several contents of TCF, and focuses on three objectives. The first objective is to summarize the qualitative characteristics of useful financial information. The second one is to illustrate the linkage between the fundamental and the enhanced qualitative characteristics. The third objective is the recognizing financial information criteria while considering cost constraints. The documentary research method was used for analyzing from contents in TCF. Then, the linkage between fundamental and enhancing qualitative characteristics was demonstrated, with illustrating examples. Examples of the cost constraint of useful financial reporting were also analyzed. Our results show that the useful financial information has two characteristics: fundamental characteristics and the enhancing qualitative characteristics. The fundamental qualitative characteristics are the needed characteristics, which recognized in information on the financial statements.The enhancing qualitative characteristics are considered in case of enhancing the fundamental qualitative characteristics or deciding which alternative accounting measurement should be used, etc. Finally, the financial information should be recognized in financial statement, if the resulting benefits exceed the cost of providing that information.