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Hi Sir,
Found these questions from BPP Revision KIT.Acc. to the Conceptual Framework of Financial Reporting, which two are part of faithful representation?
1.It is neutral.
2.It is relevant.
3. it is presented fairly.
4. it is free from material errors.
The answer states 1 and 4.Why not 2 and 3. Really confusing!
Faithful representation means that the figures should be as accurate as possible.
So they should be neutral (i.e. not biased to appear better or worse than they are) and they should not have material errors.Whether the figures are relevant to the person looking at them, or whether they are presented in a good or bad way, does not affect how accurate they are.
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