Define: Understandability

UK Accounting Glossary

Definition: Understandability


Quick Summary of Understandability


Qualitative characteristic of financial statements, understandable by users.



What is the dictionary definition of Understandability?

Dictionary Definition


Understandability is the principle that the financial information provided by a company should be such that it’s significance is capable of being perceived by a person with a reasonable knowledge of accounting and business and a willingness to study it with reasonable diligence.

The information provided should not leave out anything material, but should also not be so comprehensive in nature that it obscures any main points of significance.

This concept is defined in S.2 of the Financial Reporting Standard Applicable in the UK and Republic of Ireland.

The concept is also recognised in the International Accounting Standards Board’s (IASB) Conceptual Framework for Financial Reporting.


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https://payrollheaven.com/define/understandability/
Modern Language Association (MLA):
Understandability. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. July 21, 2019 https://payrollheaven.com/define/understandability/.
Chicago Manual of Style (CMS):
Understandability. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/understandability/ (accessed: July 21, 2019).
American Psychological Association (APA):
Understandability. PayrollHeaven.com. Retrieved July 21, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/understandability/

Definition Sources


Definitions for Understandability are sourced/syndicated from:

  • Oxford Dictionary Of Economics
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd December 2018.