Relevance is of primary importance in financial reporting, whereas comparability is of secondary importance.

Question

Quizplus · Accepted Answer

Relevance refers to the information in financial reporting being important and useful to users in making decisions. Comparability refers to ensuring that the financial information presented can be compared with similar information from previous periods or other companies. While comparability is important for making meaningful comparisons, relevance is considered more important as it directly impacts the decision-making process.

Relevance Is of Primary Importance in Financial Reporting, Whereas Comparability