understandability

understandability The accounting principle that the financial information provided by a company should be such that its significance is capable of being perceived by a person with a reasonable knowledge of business and accounting and a willingness to study it with reasonable diligence. The information should not leave out anything material, but should not be so comprehensive that the main points of significance are obscured.

The concept is defined in the Financial Reporting Standard Applicable in the UK and Republic of Ireland. It is also recognized in the International Accounting Standards Board’s Conceptual Framework.

• first-class paper
• first-in-first-out cost
• first-loss policy
• first mortgage debenture
• first notice day
• first preferred stock
• first-tier market
• first-year allowance
• fiscal agent
• fiscal policy
• fiscal year
• fish-bone diagram
• fixed asset
• fixed capital
• fixed capital formation
• fixed charge
• fixed debenture
• fixed exchange rate
• fixed-for-floating
• fixed-interest security
• fixed overhead cost
• fixed-price tender
• fixed production overhead
• fixed-rate loan
• fixed-rate mortgage