Accounting information is that included in the annual accounts, which, in turn, must be relevant and reliable.

When is information relevant?

Information is relevant when it is useful for making different types of decisions, such as economic or financial ones. These decisions may concern the assessment of past, present or future events, confirming or correcting them. Economic or financial decisions clearly show their relevance when what is ultimately to be determined are matters as important as the liquidity of an organisation, its risk or its profitability.

When is information reliable?

If we refer to the standard, “it is reliable when it is free from material errors and is neutral — that is, free from bias — and users can rely on it being the true and fair view of what it purports to represent”. In other words, in addition to being relevant, all the relevance of the information must be trustworthy, since otherwise it will mislead those who take decisions about the organisation.

In addition to reliability, the standard incorporates the assumption of completeness into the information, deriving it from the true and fair view itself. But when is completeness achieved? Well, it is achieved when all the data are available in the information supplied.

In addition to the requirements already set out, it should also be stressed that financial information must comply with the premises of comparability and clarity. As regards comparability, this refers to adapting to a specific time period shared by all organisational units, thereby making it possible to compare and contrast the situation of the different organisations, and implying similar treatment for transactions and other economic events occurring in similar circumstances. Finally, clarity — although to some extent directly linked to reliability — implies that users can form a clear idea of the information making up an organisation’s annual accounts, and thus generate sufficient knowledge to make the soundest possible decisions.