The IASB Conceptual framework identifies two fundamental qualitative characteristics

Running head: ACCOUNTING WORK1 Accounting WorkNameInstitutional Affiliation Running head: ACCOUNTING WORK2Accounting Work1. a)The IASB Conceptual framework identifies two fundamental qualitative characteristicswhich ensure that financial information at any one given time is relevant. The two fundamentalqualitative characteristics are relevance and faithful representation. Relevance as a fundamentalcharacteristic implies that the financial information provided or generated at any one given timeshould be such that it impacts the decision-making process of a given individual or entity at onetime or the other once he or she goes through the provided financial information (Young, 2016).In this way relevance can be denoted in a number of ways which are not limited to the content ofthe information and the timeliness with which the said information is made available. The criticalaspect or the focal point is the fact that both of these two elements are relevant given the fact thatthey both impact the decision making process that uses the financial information in one way oranother. An added aspect of relevance through limited to the specifics of any given situationwhich the financial information is used is materiality of the information. Materiality can be a partof relevance but based on the nature or the magnitude of the items that are represented by thefinancial information in question.Faithful representation is basically defined by three common characteristics which mustall be present in order for the qualitative characteristic to suffice. The financial information mustbe free from error of any sort, complete and neutral (Young, 2016). In order to ensure faithfulrepresentation the information must not be biased or provided in a context that gives moreweight to one set of facts than another. It must be complete and nothing is missing and free fromerrors which might otherwise provide a misrepresentation. The lack of any of the three elements Running head: ACCOUNTING WORK3means that the information is not faithfully represented and hence the qualitative characteristic isnotably missing.B)There are four qualitative characteristics which as a whole enhance the usefulness ofinformation. They include comparability, timeliness, verifiability and understandability. Theexistence of all four elements ensures that the information provided to the decision maker isuseful to him or her in the intended manner. The four also serve to enhance the two fundamentalqualitative characteristics of relevance and faithful representation….parability means the ability by the individual to be able to make relevant identificationsas pertains to similarities and any differences that are in existence among the items in thefinancial information going back a number of different periods. The decision maker using theinformation in this way is able to identify any existing similarities and differences in the financialstatements and hence make appropriate decisions. The use of known methods of accountingduring preparation of the information hence achieves comparability.Verifiability is achieved when different individuals most likely those independent from theentity intending to use the information agree or come to consensus regarding whether theinformation presented or the items in the financial information are indeed a faithfulrepresentation (Young, 2016). Based on their knowledge they are able to verify the contents ofthe information independently.Understandability is the manner in which the information is presented that enables thedecision maker to understand all the items presented and all the facts stated. In order to achievethis, information must be presented in a manner that is clear, coherent and concise. Running head: ACCOUNTING WORK4Timeliness refers to the manner or the duration in which the financial information is madeavailable to the decision maker. It broadly refers to the timely provision of the financialinformation and ensuring it is reliable but working within the set time limits in place at any giventime.2.There are a number of implications that are associated with the setting up of a businesseither as a sole proprietorship or as a partnership. When one sets up a business venture as a soleproprietorship he or she is the ultimate decision maker meaning that he does not rely on anyoneto make the business decision at any one given time. The legal requirements required for settingup this kind of business are very minimal and the business owner is able to keep all the businessprofits to him or herself. He or she also bears the losses him or herself and is answerable to noone.A partnership requires the individual to share responsibilities with the partner or partners,share the business profits depending on money invested (SBDC, 2016). The partners also sharein the losses if the company happens to perform poorly. Partnerships offer more opportunities fortax planning and have minimal legal requirements. The potential for conflict is also very high.3.An intangible asset can basically be defined as an asset but one that is not in any wayphysical in nature. They are non-monetary assets set apart from other kinds of assets by thesimple fact that they lack physical substance or content that can be touched or that can beidentified with at any one given time (Deloitte, 2016). Intangible assets are unique in the mannerthat apart from not being physical in nature, they arise from rights that can either be contractualin nature or legal in nature (Deloitte, 2016). In this way the intangible assets despite being owned Running head: ACCOUNTING WORK5by people or corporate entities, they are actually separable from them in the fact that that if theindividual loose the contractual rights or the legal rights giving them dominion or possession ofthe intangible asset then automatically they are separated from the intangible asset in totality.Intangible assets for better assets can be likened to things or concepts such as goodwill andrecognition. They are known to be in existence but they cannot be touched as they are notphysical in nature despite their known existence.Intangible assets are numerous in the world all over with many of them under the ownershipof individuals but mostly owned by corporate entities such as major companies such as MicrosoftCorporation among others. Examples of intangible assets include patents, copyrights, trademarksand business methodologies. One common factor that can be observed from all three is the factthat they are all known to exist and any given number of companies can stake their claim overany of the. What gives the owners of the intangible asset such as patents the ownership aspect isthe recognition by the law as their owner. In this way the law accords the company or theindividual a legal right of ownership over the intangible asset. In this way intangible assets canbe termed as intellectual property and in actual sense people can be sued for infringement of theintellectual property. This can be likened to when someone trespasses on someone’s land orbuilding both being tangible assets and they are brought before a court. The same can happen forintangible assets only this time it is referred to as infringement in most cases. Running head: ACCOUNTING WORK6ReferencesDeloitte,. (2016). IAS 38 — Intangible Assets. Iasplus….. Retrieved 30 November 2016, fromhttp://www.iasplus…./en/standards/ias/ias38SBDC,. (2016). Partnership. Smallbusiness.wa.gov.au. Retrieved 30 November 2016, fromhttps://www.smallbusiness.wa.gov.au/business-topics/planning-structures/businessstructures/partnership/Young, E. (2016). Conceptual Framework: Objectives and qualitative characteristics.Supplement to IFRS outlook. Retrieved 30 November 2016, fromhttp://www.ey…./Publication/vwLUAssets/Supplement_86_GL_IFRS/$FILE/Supplement_86_GL_IFRS.pdf