This point is important; it means that in the preparation of financial statements a level of reasonable competence can be assumed; this has an impact on the way and the extent to which information is reported.
Performance Obligation: when a company agrees to perform a service or sell a product to a customer. Only if circumstances change dramatically will the Board consider a more stable measurement unit. Hence, reliability of such information has to be taken into consideration by the users of accounting information before a decision is being made using such information.
Any delay may loose its relevance for the users.
What are some of the benefits of accounting information? The costs of providing accounting information are paid primarily to highly trained accountants who design and implement information systems, retrieve and analyze large amounts of data, prepare financial statements in accordance with authoritative pronouncements, and audit the information presented.
The primary objectives of financial reporting are as follows: 1.