Reliability
Information should be free from significant errors and bias and should give a reasonable representation of what it is supposed to represent.
Some information might be relevant but not reliable. For example, it might be relevant
to know that a company has taken legal action against a competitor for damages due
to infringement of a copyrighted design, but how reliable can that information be if the
case has not yet been settled by a court?
Comparability
Also known as 'conSistency', this relates to the need for items within the financial statements to be treated in the same way from one period to the next. This allows users to establish performance trends both within the business itself (e.g. over a five-year period), and by comparison with other similar businesses. Details of accounting policies that have been adopted by a business are disclosed when presenting financial statements. To aid compatibility, it is usual for corresponding information for the previous financial period to be presented alongside that for the current period.
by a business can be changed if appropriate. For example, if an asset was incorrectly
valued last year, a correction can be made this year provided that information regarding
the reasons for the change in the valuation policy are explained.
