asked 49.1k views
4 votes
Neutrality is one of the three required characteristics for financial information to be faithfully represented. What does it mean for financial information to be neutral?

asked
User Rosetta
by
7.6k points

1 Answer

5 votes

Final answer:

Neutrality in financial information means it is free from bias or judgment and presented objectively. It ensures the information is trustworthy and reliable for decision-making.

Step-by-step explanation:

Neutrality in financial information means that it is free from bias or judgment. It requires the information to be presented objectively and without any personal preferences, beliefs, or opinions. This allows the information to be trustworthy and reliable for decision-making. For example, if a company's financial statements are prepared in a neutral manner, they will accurately reflect the company's financial position, performance, and cash flows without any manipulation or bias. Overall, neutrality ensures that financial information is presented in a fair and unbiased manner, allowing users to make informed decisions based on the facts and figures.

answered
User RollingBoy
by
8.7k points
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